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CATALIST-LISTED MoneyMax Financial Services said on Tuesday its wholly owned subsidiary, Cash Online Sdn Bhd has entered into an agreement with CMS Top Holdings Sdn Bhd and four individuals to purchase interests in 13 pawn brokers in Malaysia for RM56.6 million (S$18.3 million) in cash. It plans to fund the acquisitions through internal resources.
This will provide the group with a good opportunity to expand its geographical network of pawn broking operations in Malaysia, the group said.
While the four individuals were not named, the group said that they were "not related to the directors or controlling stakeholders of the company".
Completion of the proposed acquisition is conditional upon MoneyMax being satisfied with the outcome of the valuation of the unredeemed pledges in the target companies, and approval from the relevant authorities.
For the 12 months ended Dec 31, 2016, aggregate net loss of the targets was about RM1.02 million, and net tangible assets was approximately RM50.1 million.
Assuming that the proposed acquisition has been effected as at Jan 1, 2016, financial effects of the deal on the earnings per share of the group is not material, the group said on Tuesday.
Separately, Chong Mei Sang - who in 2014 established a joint venture with MoneyMax to carry on the business of pawn broking in Malaysia - has entered into a sale and purchase agreement with CMS Top Holdings and three individuals to acquire about 1.96 million shares each in the capital of the target companies, including Pajak Gadai Bukit Gambir Sdn Bhd and Pajak Gadai Senai Sdn Bhd.
MoneyMax is a pawnbroker, retailer and trader in pre-owned jewellery, watches and branded goods.