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GS Holdings buys F&B operator for S$3.6 million

GS Holdings, an investment holding company of dishware washing and cleaning services, on Monday said that it has signed a conditional sale and purchase agreement with Ang Siew Kiock to buy Hao Kou Wei, a company in the business of letting and operating food courts, coffee shops and eating houses, for S$3.6 million.

Ms Ang, the sole shareholder and director of the target company, is also the spouse of GS Holdings’ executive chairman and CEO, Pang Pok. 

Hao Kou Wei currently has one wholly owned subsidiary, Rasa Sayang Village, which was set up for the purposes of acquiring Rasa Rasa @ Kampung Changi Restaurant which operates a halal eating house at Changi Village.

"As the proposed acquisition contemplates the group’s growth into the food and beverage industry, (it) is a potential expansion of the group’s existing business which may or may not be a material change to the risk profile of the group," GS Holdings said.

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RHT Capital has been appointed as the independent financial adviser to provide an opinion on whether the acquisition is on normal commercial terms and is not prejudicial to the interests of the company and its minority shareholders. Thereaafter, the audit committee will also give its take.

An extraordinary general meeting will also be held to seek shareholders’ approval for the deal.

There was no independent valuation conducted on the target group. Based on the audited financial statement of the target for FY2017, the net tangible asset value as at end-December 2017 was S$597,281. The target firm also made a profit before tax of S$627,664 in FY2017.

Thirty per cent of the consideration will be made in cash, and the remainder by an issuance of 14 million new shares in the company at S$0.18 each, equivalent to the volume weighted average price of S$0.18 per Share for trades done on the Singapore Exchange on Dec 14, the last full market day before the agreement date.

GS Holdings said that the deal is an acquisition opportunity that will enhance value for shareholders, as the company will expand its presence in the food and beverage industry beyond its existing dishware washing and cleaning related business, which currently focuses on the cleaning needs in the food and beverage industry in Singapore. This will likely also generate further investor interest in the company.