AT Systemisation seals deal to acquire industrial glove maker for RM22mil
26 Jun 2020
AT Systemisation Bhd (ATS) is acquiring an industrial glove maker Pearl Glove Sdn Bhd (PGSB) for RM22 million cash.
In a filing today it said it entered into a share sale agreement with Hai Hong Capital Sdn Bhd, P’ng Sim Guan, P’ng Lai Heng, Hai Hong Holdings Sdn Bhd and Aaron Khoo Teng Soon for the proposed acquisition.
It said the immediate outlook for PGSB’s existing business, as a trusted and tested OEM/ODM manufacturer of safety gloves is extremely positive as the demand for the industrial safety gloves increases proportionately with improving workplace health and safety practices globally.
Presently, PGSB has gloves manufacturing facilities located in Sungai Petani, Kedah with installed production lines capable of manufacturing work gloves.
With the proposed acquisition, ATS said it intends to venture into the manufacture of medical gloves business in three years’ time.
“The group intends to install and commission up to 20 new production lines within 36 months to manufacture medical grade nitrile examination gloves which is expected to yield a production capacity of up to three billion pieces of gloves per annum,” it said.
The estimated capital expenditure required to install and commission all the 20 production lines is approximately RM180 million, which is more than half of the company’s current market capitalisation of about RM239 million.
“The current market conditions are extremely favorable for turnkey operators to begin new production lines to take advantage of spot prices of gloves,” it said.
Source: The Edge Markets