Frencken Group is acquiring Penchem Technologies, a high tech company focused on the designing, developing, formulating and manufacturing of polymer materials that are primarily aimed at applications and solutions for the electrical and electronics industry and also in markets such as coatings, adhesives, as well as fillers for industries such as automotive, marine and aerospace.
In conjunction with this deal, Frencken will be purchasing 261,500 ordinary shares in the company from two individuals - Wong Kah Gin and Ng Chee Mang - representing a 50% stake in Penchem. The group has also simultaneously entered into a subscription agreement with Penchem to subscribe for 10,058 ordinary shares amounting to 1.92% of the ordinary shares of Penchem.
The consideration payable for this transaction is RM15.6 million ($5.2 million), which the group will satisfy wholly in cash.
The net book value of Penchem and its subsidiary was RM16.3 million as at Dec 31, 2021. No independent valuation was conducted on Penchem.
The subscription price for 1.92% representing 10,058 ordinary shares of Penchem is RM0.6 million.
This partnership with Frencken will allow Penchem to significantly leverage on the synergistic benefit arising from global market accessibility of both companies. This translates to Penchem having a larger and broader clientele potentially scaling its revenue baseline.
See also: Nippon Steel, US Steel file lawsuits after Biden blocks deal
Shares in Frencken closed 6.17% lower on Jan 27 at $1.52.
