AA Group in S$25m acquisition deal

AA Group Holdings announced on Monday that it has entered into a conditional sale and purchase agreement with Poh Huat Heng Corporation (PHH) to acquire the entire issued and paid-up share capital of Engineering Manufacturing Services and its subsidiary Germaxco for S$25 million.

This will be paid for in three ways: issuance of three-year redeemable, transferable, zero coupon bond by the company to PHH in the principal amount of S$7 million at completion, novation to the company of the S$11 million debt owing by PHH to Engineering Manufacturing Services, and cash payment of S$7 million to PHH within one month of completion.

In an SGX filing, AA Group said that the proposed acquisition will be in the best interests of the company as Engineering Manufacturing Services and Germaxco are "financially strong and profitable which will be able to provide consistent returns". It added that the proposed acquisition presents a "good opportunity" for the company to diversify its business and revenue stream.