KUALA LUMPUR (May 31): Rubberex Corp (M) Bhd said it is buying test kit manufacturer Reszon Diagnostics International Sdn Bhd for up to RM180 million.
The purchase from Law Eng Lim and Revongen Corporation Sdn Bhd will be satisfied via a combination of cash and new shares of Rubberex, and will be subjected to an annual profit guarantee of RM50 million for 2022 and 2023.
Reszon is principally involved in the manufacturing of innovative vitro diagnostics test kits, Covid-19 rapid test kits and test kits specializing in infectious diseases diagnosis and drug of abuse screening for medical professionals and clinical diagnostic markets.
The principal markets of Reszon’s products are Malaysia and France, Rubberex said in a bourse filing.
Subsequent to the acquisition, Rubberex intends to diversify into the healthcare sector, which includes the manufacturing and sales of test kits and other healthcare related products and services.
The group has also proposed to change its name to Hextar Healthcare Bhd.
The acquisition and diversification exercises seem timely, coming off the pandemic years which had hugely benefited both the glove and healthcare industries, said Rubberex executive director Goh Hsu-Ming in a statement.
He said the group’s progression into the healthcare sector, specifically in the manufacture of medical devices such as test kits, is complementary to its existing glove business.
“We are able to offer a wider range of products to the market and provide an alternative income-generating source, besides personal protective equipment,” he said.
Rubberex’s largest shareholder, Datuk Eddie Ong Choo Meng added: “Our proposed acquisition is in line with the group’s strategic aim of enhancing shareholders’ value in the long term through the provision of quality healthcare products and services for the global population.”
Rubberex shares finished up 2.5 sen or 4.17% at 62.5 sen on Tuesday (May 31), giving it a market capitalisation of RM572.19 million.