ISOTeam intends to acquire four local companies for an aggregate consideration of about S$11.0 million, under a plan to become a complete building and maintenance team, said the repairs, redecoration, addition and alteration specialist on Monday.
The four companies are Accom International, Accom Pte Ltd, Industrial Contracts Marketing (ICM) and Rong Shun Landscape & Construction.
These companies are involved in new and complementary business areas that ISOTeam has yet to significantly tap into. The company said they will add both depth and width to the group's expertise and specialist capabilities.
Upon the completion of the proposed acquisitions, the group will have 100 per cent ownership of all the companies except for ICM, in which its stake will be 90 per cent.
The transaction structure for the various proposed acquisitions is as follows:
* Accom International: approximately S$3.5 million for 100 per cent interest, to be half covered by cash and the other half, by consideration shares.
* Accom: approximately S$4.5 million for 100 per cent interest, also to be half covered by cash and half via consideration shares.
* ICM: approximately S$2.1 million for a 90 per cent interest to be satisfied half in cash and half via consideration shares. The remaining 10 per cent interest will be acquired subsequently at a consideration equivalent to a price-earning ratio of five times ICM's net profit after tax as at June 30 2015; this will be fully satisfied in cash.
* Rong Shun: S$0.9 million for 100 per cent interest, to be fully satisfied via consideration shares.
The group will fund the cash portion of the consideration through internal resources, which is not expected to have any material impact on the earnings per share and net tangible assets per share of the group for FY2015. As at FY2013, the group had a cash position of around S$17.6 million.