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Vizione signs deal to acquire 51% of glove maker for RM5m

Vizione signs deal to acquire 51% of glove maker for RM5m

01 Dec 2020

Vizione Holdings Bhd will be acquiring 51% of a medical supply, medical product, disposable medical supply and medical device manufacturer in Malaysia, which also makes surgical gloves, for RM5 million.

In a bourse filing, the construction and engineering company announced that its wholly-owned unit VIP Index Sdn Bhd had signed a share sale agreement with SSN Medical Products Sdn Bhd’s Ang Teck Leong, Lim Kiat Yee and Ravendran Uthrapathy for 2.31 million shares or a 51% stake.

The 51% stake will be funded through Vizione’s internally generated funds.

The deal has a profit guarantee, where SSN must ensure that it achieves a profit before tax (PBT) of no less than RM15 million for the financial year ending Dec 31, 2021 (FY21).

“The proposed acquisition is part of the group’s expansion and is expected to provide a steady stream of revenue to the group over future financial years. It will further improve the financial performance of the group,” Vizione said, explaning the rationale behind the acquisition.

In a separate statement, Vizione managing director Datuk Ng Aun Hooi said glove demand had continued to be strong due to the Covid-19 pandemic.

“Our goal is to triple our glove production volume from the current 500 million pieces to 1.6 billion pieces per year within the next 18 months.

“We believe that even after a vaccine is on the market, glove demand will still be robust and elevated due to widespread health awareness globally, plus increased usage of gloves in the medical field,” Ng said.

He highlighted that current customers will account for about half of SSN’s current and future production capacity, with the balance reserved for spot orders carrying higher profit margins.

Ng said SSN’s niche within the sector is production of speciality gloves, such as elbow-length latex medical gloves, gloves for gynaecology use and gloves for chemotherapy use. Apart from serving as an original equipment manufacturer (OEM), SSN also has its own brand, namely “Hanser”.

“Approximately 80% of our current production is exported overseas, mainly to the US, Germany, China and other European countries. We are excited about the prospect of SSN and believe that we can unlock its full potential by leveraging it with experienced business management, a strong funding capability and strategic growth plan,” Ng said.

Vizione signed a heads of agreement (HoA) with Ang, Lim and Ravendran in September to acquire the 51% stake in SSN.

Shares in Vizione were 4.71% or two sen higher at 44.5 sen at the noon market close today, valuing it at RM350.89 million. It saw 11.32 million shares done.

Source: The Edge Markets