Pecca to acquire 51% stake in Rentas Health, diversifies further into healthcare
02 Aug 2021
Pecca Group Bhd has proposed a diversification of its business to include healthcare and intends to acquire a 51% stake in Rentas Health Sdn Bhd for RM100 million.
According to the group’s Bursa filing, the acquisition will be satisfied via RM50 million in cash and the issuance of 11.99 million new shares in Pecca at an issue price of RM4.17 per share. The price-to-earnings of the acquisition is 8.53 times based on the profit guarantee and 51% stake to be acquired by Pecca.
Pecca, whose shares were halted for trading today, is principally involved in the styling, manufacturing and installation of leather upholstery for seat covers for the automotive and aviation industries. The proposed diversification would allow the group to include healthcare business as part of its core business, which is in line with the group’s objective to seek new business opportunities and additional income source from the healthcare business.
The board expects the healthcare business to divert 25% or more of the net assets of Pecca and/or to contribute more than 25% or more of the net profits of the group moving forward. The board proposes to seek the approval of the shareholders at an EGM to be convened for the proposed diversification in conjunction with the proposed acquisition.
“There is a profit guarantee of no less than RM23 million on Rentas for financial year ending June 30, 2022 and the proposed acquisition of 51% stake in Rentas will certainly contribute positively to our bottomline,” remarked Pecca group managing director Datuk Teoh Hwa Cheng.
Rentas Health is principally involved in the supply of medical equipment. Upon completion of the acquisition, the healthcare business of the Pecca group would include, amongst others, distribution of PPE that include face masks, face shields, and PPE garments; distribution of Covid-19 RT-PCR test kit; provision of medical screening services; and distribution of healthcare related products and services.
Currently, Rentas Health is the distributor for two facemask brands – Rentas Health and Callie – as well as an appointed agent for BioSewoom Real-Q 2019-nCoV Detection Kit. Through the exercise, the group will be able to tap into the existing customer base and distribution networks of Rentas Health to attain a wider customer outreach and to achieve business synergy between its existing healthcare business and new Rentas Health’s business.
Source: The Sun Daily