MAINBOARD-LISTED SIIC Environment : BHK 0% announced on Thursday (Nov 3) that its wholly owned subsidiary has entered into a sale and purchase agreement to acquire investment holding company Yun Shui Technology at a consideration of 296.2 million yuan (S$57.4 million).

Yun Shui Technology, a wholly owned subsidiary of Yunnan Water (Hong Kong), was listed for bidding with a price of 296.2 million yuan, according to the applicable laws in the People’s Republic of China.

Together with the listing price, the bidding price was also determined with reference to the enterprise value of 297.9 million yuan as at Dec 31, 2021 – the entire value of the shareholders’ equity in the company – the group noted in a bourse filing the same day.

The consideration amount will be funded by internal resources of the group and will be remitted to Yunnan Water (Hong Kong) in one lump sum within three business days from the agreement.

Assuming the acquisition effected on Jan 1, 2021, the pro forma net profit for SIIC Environment would have rose by 1.4 per cent to RMB716 million as compared to RMB706.2 million before the acquisition, whereas pro forma earnings per share would slightly decrease to RMB27.73 cents, as compared to RMB27.35 cents previously.

Yun Shui Technology currently holds three wastewater treatment plant projects and one water supply plant project in the Yangtze Delta region, with a total designed treatment capacity of 160,000 tonnes. The unaudited book value and net tangible asset value of the company both stood at RMB150.1 million as at Jun 30, 2022.

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“The acquisition will enable the group to expand its wastewater treatment capacity in the Yangtze Delta region and generate returns for the group,” the filing said.

Shares of SIIC Environment were up 0.65 per cent or S$0.001 at S$0.155, before the announcement was made.