Press Releases

• RM311.25 million acquisition to complement existing business and introduce further synergy within the Group
• The bolt-on acquisition expected to contribute positively to Perangsang Selangor’s financial performance from 3Q19

Shah Alam, Malaysia, 24 July 2019 – Kumpulan Perangsang Selangor Berhad (“Perangsang Selangor” or “the Company” or “the Group”) (KPS, Bursa: 5843; Bloomberg: KUPS:MK; Reuters: KPSB.KL), received its shareholders’ approval at the Extraordinary General Meeting today for the acquisition of 100% equity stake in Toyoplas Manufacturing (Malaysia) Sdn Bhd (“TMM”) and its subsidiaries (collectively “TMM Group”) by the Company’s subsidiary, Perangsang Dinamik Sdn Bhd, for RM311.25 million.

Having full range of expertise, TMM is involved in the plastic injection moulding business with an integrated capability from mould fabrication, precision injection moulding and secondary processes to full assembly of parts or products. A one-stop solutions provider to its clients, TMM operates from seven manufacturing plants of over 1,000,000 square feet across three countries, i.e. Shanghai, Dongguan and Nanning in China; Ulu Tiram, Muar and Senai in Malaysia; and Jakarta in Indonesia, thus enjoying a wide customer base from diversified sectors.

The purchase price of RM311.25 million, which values the acquisition within the industry benchmark in terms of Enterprise Value to Earnings Before Interest, Tax, Depreciation and Amortisation (“EV/EBITDA”) and Price to Earnings (“P/E”) ratios of 5.23x and 8.66x respectively, will be fully satisfied by internally generated funds and borrowings. The transaction will be funded by a mixture of equity and term loan, each amounting to RM161.25 million and RM150.0 million, respectively.

Ahmad Fariz Hassan, Managing Director / Group Chief Executive Officer of Perangsang Selangor said:

“Backed by the mandate from our shareholders, TMM meets all the desired investment criteria by unlocking full potential of Perangsang Selangor’s plastic injection moulding business. It is anticipated to provide further synergy within the Group via TMM’s complementing CPI (Penang) Sdn Bhd’s (“CPI”) business dynamics. Potential synergy will likely be, among others, from the areas of client sourcing and combined procurement of raw materials, which is expected to improve overall business efficiency and optimise cost for both entities”.

Marking Perangsang Selangor’s second - yet bigger - entry into the plastic injection moulding business after CPI, the acquisition provides the Group with greater regional presence and stronger brand positioning as an integrated plastic injection moulding solutions provider. TMM boasts a strong and diverse multinational clientele from the communications & multimedia and automotive sectors as well as from volume-based consumer appliances sector.

TMM’s proven capabilities contribute towards its track record in retaining customers - most of whom have been with TMM between 8 and 21 years - allowing it to benefit from their product developments and business growth. Its key customers are industry market leaders and multinational companies in their respective sectors. For quality and service excellence, it holds various international quality management certifications such as ISO13485:2003, ISO14001:2004 and ISO9001:2008.

TMM Group’s financial performance is expected to be sustainable, driven by robust outlook of the E&E industry in China and Malaysia. The outlook is envisaged to remain resilient, sustained by growing demand for plastic components from various underlying industries including packaging, home appliances, automotive and medical devices.

“The bolt-on acquisition is a competitive strategy that will create economies of scale, increase control over supply and value chains, and help expand the Group’s existing business by venturing into new markets. Coupled with its diversified geographical and customer mix, we are optimistic that TMM Group will be able to contribute positively to Perangsang Selangor’s financial performance from the third quarter ending 30 September 2019 onwards, ultimately generating sustainable growth and greater returns for all our stakeholders,” Ahmad Fariz concluded when elaborated on the strategy behind the acquisition.

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About Kumpulan Perangsang Selangor Berhad (www.kps.com.my)

Incorporated on 11 August 1975, Kumpulan Perangsang Selangor Berhad (“Perangsang Selangor” or “the Company” or “the Group”) is a public limited liability company listed on the Main Market of Bursa Malaysia Securities Berhad under the Industrial Products & Services Sector. Perangsang Selangor has core investments in the Manufacturing sector, as well as businesses in the Trading, Licensing and Infrastructure sectors. While strengthening our business to optimise returns, Perangsang Selangor is committed to providing significant contributions towards sustainable development in the areas of economic, environment and social for the benefits of all stakeholders.

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