The shares will be priced at a premium of 15% over the six-month volume weighted average price (VWAP) six months prior to the completion date of the proposed acquisition, subject to a minimum issue price of 29.7 cents.
This 29.7-cent level represents a level of discount not exceeding 10% to the VWAP per LMS share of 33 cents on Jan 22, which is the last market day on which the LMS shares were traded just before the deal was signed. LMS will pay the remaining 34% via cash.
LMS says this deal will boost its testing and certification business, as well as generate future revenue streams and operating cash flows.
It will further strengthen its geographical footprint in the Asian region with the target's operations in Hong Kong, Shanghai and Hainan.
See also: ISDN acquires 51% stake in Indonesian hydropower plant contractor for $2 million
LMS Compliance's executive director and CEO Louis Ooi calls the deal a "significant milestone" in the company's "growth trajectory".
"By integrating their specialised certification and regulatory consulting services for the novel food development sector into our product offerings, we are expanding our geographical footprint and creating robust new revenue streams," he adds.
LMS Compliance last traded at 33 cents. It was listed back in Dec 2022 at 26 cents.
