Karex buys US Line One assets for RM32 million

PETALING JAYA: Karex Bhd’s wholly owned subsidiary Karex International Sdn Bhd (KISB) is buying Line One Laboratories, Inc. (USA)’s trademarks and intellectual property rights, which will enable Karex to increase its market share in the US, for US$8 million (RM32 million) cash.
Line One owns the intellectual property rights for trademarks and patents of Trustex, Kameleon, Fantasy and Trustex 360 on a worldwide basis.
Karex said the purchased assets, especially the Trustex brand, are established and key brands in the health segment of the US condom market and has the Food and Drug Administration 510k approvals to be marketed in the US.
“With the acquisition of Trustex, Karex Group will be able to increase its market share in the sale of condoms and lubricants under the health segment within the US. In addition, the exercise is expected to increase the customer base of Karex Group, where cross selling opportunities can be further developed,” it explained in a stock exchange filing.
The acquisition will be financed by proceeds raised from the private placement exercise completed by Karex on March 11, 2015.
The exercise is expected to be completed within 90 days from the signing of the APA.
Meanwhile, Karex’s net profit for the fourth quarter ended June 30, 2016 decreased by 25.5% to RM12.59 million as compared to RM16.97 million in the corresponding quarter in the previous year attributable to the adjustment of selling price with the appreciation of the ringgit.
Revenue was higher by 3.5% at RM82.33 million compared to RM79.57 million in the corresponding quarter in the previous year due to higher volume of condom sales.
For the 12 months period under review, its net profit rose 12.8% to RM67.16 million from RM59.55 million a year ago while revenue grew by 15.1% to RM343.22 million RM298.09 million as compared to the previous year.