Bintai Kinden gets nod to acquire Johnson Medical for RM50m

KUALA LUMPUR (Nov 22): Bintai Kinden Corp Bhd has received its shareholders’ nod to acquire the entire interest in Johnson Medical International Sdn Bhd for RM50 million.

Johnson Medical is a mechanical and electrical (M&E) engineering service provider focused on the manufacturing, supply and installation of medical support systems and related equipment, ventilation systems for clean air, operating theatres, critical care units, fluid management pendants and medical gas delivery systems.

In a statement on Monday (Nov 22), Bintai Kinden said the acquisition would be satisfied via a combination of cash amounting to RM26 million and the issuance of approximately 58.5 million new Bintai Kinden shares at 41 sen each.

The exercise would allow the group to expand its existing customer base and widen its M&E engineering service offerings to include the healthcare services industry in Malaysia.

Bintai Kinden deputy chief executive officer (CEO) Azri Azerai said the acquisition presents an opportunity for the group to expand its core construction related businesses via the acquisition of businesses or investments that are in similar industries/sectors to its existing core business in the construction sector.

“The acquisition will enable the Bintai [Kinden] group to leverage the expertise, know-how, skills and resources of Johnson Medical to expand its construction business segment, tender larger construction projects in the medical and healthcare industry as well as enhance the group’s presence in the construction industry.

“It would allow immediate access to an ongoing business with unbilled order books of approximately RM34.6 million, comprising supply and installation of medical related equipment and construction of medical related facilities (operating theatres, ventilation systems, medical supply facilities and gas supply equipment) in Malaysia.

"Accordingly, the acquisition is expected to be earnings-accretive to the enlarged group when Johnson Medical materialises the profit therefrom,” he said.

Bintai Kinden said the acquisition will come with a guaranteed net profit of RM9.1 million over two years, which translates into an average net profit of RM4.55 million for the financial year ending March 31, 2022 (FY22) and FY23.

At the midday break on Monday, Bintai Kinden settled half a sen lower at 36 sen, valuing it at RM137.48 million.

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