PETALING JAYA: Berjaya Corp Bhd has inked a memorandum of understanding with its executive chairman Tan Sri Vincent Tan Chee Yioun and Berjaya Retail Sdn Bhd to acquire a 100% stake in Singer (Malaysia) Sdn Bhd from BRetail for a net payment of RM388 million.
The acquisition will involve the issuance of 1.18 billion new BCorp shares at an issue price of 33 sen each, representing a premium of 14 sen or about 74% over last Friday’s closing of 19 sen.
The price was determined after setting off the Singer Group’s inter-company debts of RM148 million against the purchase consideration of RM536 million.
Additionally, Tan will provide BCorp with a profit guarantee that Singer will achieve a profit after tax of RM20 million per year for the financial years ending Dec 31, 2020 and 2021.
Based on the net payment of RM388 million, this profit guarantee of RM20 million per year will translate to a net price-earnings multiple of 19.4 times.
Singer and its 100%-owned subsidiary, namely Berjaya Credit Sdn Bhd, are principally involved in the business of marketing, retailing and direct selling of motorcycles and consumer durable products on cash, credit, hire purchase schemes, equal payment schemes and credit sales schemes and as general insurance agent.
“Singer has been in Malaysia for more than 100 years and is a well-known and trusted household brand name, with a wide retail network of more than 450 stores nationwide and about 3,000 independent sales agents.
“I am confident that the acquisition of Singer will enhance the profile of our group and complement BCorp’s diverse range of businesses. I believe that the acquisition will contribute positively to the future earnings of the BCorp Group,” said Tan.
