Malaysia's Etika to acquire Advend's vending operations

Singapore

IN the latest string of private deals involving Singapore's small and mid-sized enterprises (SMEs), homegrown vending machine operator Advend Systems will be acquired by a Malaysian company linked to Japanese beverage conglomerate Asahi Group.

The deal will see Etika Group, a prominent drinks distributor in Malaysia, acquire Advend's vending businesses in Malaysia and Singapore operating under the name Atlas Vending, according to a press statement this week. It is expected to be completed by the first quarter of 2020.

In October, DealStreetAsia reported that the acquisition was expected to be valued at around S$67 million. However, a source familiar with the deal disputed the figure, telling BT it was "way too low".

Other investors had also made offers for Advend, but Etika's was said to be the "most compelling".

Advend's vending operations in Singapore and Malaysia are said to outsize Etika's.

In 2011, Atlas Vending employed more than 200 people and operated more than 4,000 vending machines in total. Its annual turnover was over S$25 million.

Today, the acquisition would make Etika the largest vending machine operator in Malaysia, with more than 10,000 machines in the two countries. Advend's revenue in 2018 stood at around S$37 million.

The sale is being led by Advend's majority shareholder Dymon Asia Private Equity, which had been looking to exit its investment since early this year. The private equity firm is being advised by Daiwa Capital Markets.

According to regulatory filings, other shareholders include Yap Seng Kiong, Atlas' director who later took over as chief executive, Cayman Islands-registered company Voda and GRN Singapore.

Dymon took a majority stake in Atlas Vending - 70 per cent, according to DealStreetAsia - in 2014, the first time it did so in a firm. The acquisition had included all the shares held by Atlas' founding Tan family.

Founder Tan Ju Soon, then 63, had told The Straits Times that the decision to sell his shares did not come easily. "Vending machines, and Atlas, have been my passion for my whole life. I could have carried on for maybe two or three years, but beyond that the company would have needed new leadership," Mr Tan had said.

"Dape (Dymon Asia Private Equity) approached me a year ago, and I was initially hesitant. However, after 12 months of intense interaction, I'm now convinced that they have the dynamism, capability and resources to take good care of the company, its customers and employees."

News of Advend being acquired comes after Japanese air-conditioning giant Daikin Industries' Singapore subsidiary bought over local firm BMS Engineering and Trading for S$12.9 million in November.

In March, German chemical distributor Brenntag became a majority shareholder of Singapore speciality chemicals distribution firm Tee Hai Chem, purchasing a 51 per cent stake for an undisclosed sum.