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Kimly buys drinks manufacturer Asian Story Corporation for S$16m

KIMLY Limited, an operator of a chain of coffeeshops in Singapore, has acquired canned-drinks manufacturer Asian Story Corporation (ASC) for S$16 million in cash, it said on Monday.

ASC sells an assortment of Asian drinks such as chrysanthemum tea, winter melon tea and lemon barley under the Asian Story brand. It has a 7.7 per cent market share in Singapore, a regulatory filing by Kimly showed.

The seller, Wang Chia Ye, is also entitled to an "earn-out payment", such that if ASC earns at least S$2 million in pre-tax profit for the full-year of 2018, he would receive S$8 million, to be paid either in cash or a combination of cash and shares.

In the audited full year of 2017, ASC made earnings before income tax, minority interests and extraordinary items of S$1.15 million.

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If ASC's pre-tax profit is less than S$2 million for the year 2018, the seller would get a fraction of $8 million. Assuming that ASC posts a pre-tax profit of S$1.2 million for this year, Kimly would have to fork out S$4.8 million in "earn-out payment", Kimly said in its regulatory filing.

Any Kimly shares to be issued as part of any "earn-out payment" would be issued at a premium of 6.38 per cent to the volume weighted average price of S$0.376 for trades done on June 29, 2018, the day before the agreement was signed.