Malaysia-based packaging manufacturer Scientex has signed an agreement with several individual vendors to acquire a 42.41% stake in flexible packaging provider Daibochi for around MYR222.5 ($53.1m).
The acquisition will be executed through a conditional share sale agreement signed between both parties. The deal will allow the conditional sale of 139.1 million ordinary Daibochi shares to Scientex.
With manufacturing facilities in Malaysia and Myanmar, Daibochi offers high-barrier laminated flexible packaging for its clients, including multinational corporations in the food and beverage (F&B), fast moving consumer goods (FMCG) and specialty sectors.
The acquired business will help Scientex to further expand its product portfolio, in addition to advancing its capabilities in the flexible packaging business through synergistic and complementary products.
Subject to several conditions, the proposed mandatory take-over offer is expected to complete within two months from the date the share sale agreement becomes unconditional.
Upon completion, the acquisition is expected to contribute positively towards Scientex’s earnings for the financial year ending 31 July 2019 onwards.
Scientex Berhad managing director Lim Peng Jin said: “This synergistic merger will create a formidable regional giant from Malaysia with extensive resources to compete globally, offering an integrated range of flexible packaging solutions to a larger client base.
“Further to extending our market reach, it brings together strong technical know-how and skilled talent to tap into the exciting growth prospects for this market segment.”
“Together, we intend to become an internationally recognized global player to catalyse the future growth and development of the flexible packaging industry. To this end, Scientex endeavours to continue supporting our existing and prospective customers.”
Scientex, which is claimed to be the largest stretch film producer in Asia, produces flexible plastic packaging products such as stretch film, custom film (polyethylene (PE) film, biaxially oriented polypropylene (BOPP) film, cast polypropylene (CPP) film, agricultural film and PE flexitanks tubing.
The company operates manufacturing facilities in Malaysia, Vietnam and the US, as well as manages sales and marketing operations in Japan, Indonesia and Singapore.