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KUALA LUMPUR (July 13): Frozen food processor Saudee Group Bhd (formerly known as Sinaria Corp Bhd) has proposed the acquisition of two meat trading firms for RM20 million in a move to expand its offerings, especially the premium product range.

The purchase consideration of RM10 million for each firm will be settled via the issuance of 31.25 million new Saudee shares at 32 sen apiece, the group said in a filing with Bursa Malaysia.

Saudee said the acquisitions will allow the group to realise potential synergies, including cross-selling opportunities and better cost efficiencies arising from the consolidation of operations and utilisation of spare resources.

The group today signed a heads of agreement (HoA) with Tan Hwa Sing for the acquisition of 100% equity interest in KK Fresh Sdn Bhd, and another HoA with Tan together with Teoh Keat Poh and Suah Teik Soon for the acquisition of 100 % equity interest in Megah Deutsch Sdn Bhd.

KK Fresh is principally involved in the wholesale trading of frozen raw chicken and beef parts, while Megah Deutsch is mainly engaged in the manufacturing, wholesale and retailing of premium-grade frozen processed meat products.

Tan is the sole shareholder of KK Fresh and also holds a 30% stake in Megah Deutsch. 

Saudee said the vendors of both firms had guaranteed a net profit of not less than RM2 million for two years after the acquisitions are completed.

At 3.10pm, Saudee shares were trading 3.5 sen or 11.67% higher at 33.5 sen, valuing the group at RM50.5 million. The counter saw 1.94 million shares changing hands, more than three times its 200-day average volume of 629,895 shares.

The stock has rebounded since its recent low of 11 sen on March 19.

http://www.theedgemarkets.com/article/saudee-buy-two-meat-trading-firms-rm20m-share-issue
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