Bufab has signed an agreement to acquire all outstanding shares in Kian Soon Mechanical Components Pte Ltd in Singapore, with annual sales of approximately SG$17 million.
Kian Soon was founded in 1977 and is one of the leading distributors of C-parts in South-East Asia. In addition to distributing advanced application mechanical components, Kian Soon creates savings for its customers through provision of integrated services, including vendor managed inventory, ship-to-line, R&D technical assistance, and packaging/kitting services. Besides the head office in Singapore, the company has subsidiaries in Malaysia and Indonesia and a joint venture in Thailand. Kian Soon has 64 employees and generates annual sales of approximately SG$17 million (€10.6 million) with good profitability.
"I am very proud to announce this acquisition, which is a significant and attractive add-on to our existing businesses in Asia. We have known Kian Soon for a long time as a trustworthy, high-quality and entrepreneurial company with a good name throughout the industry. We wish the Kian Soon team a very warm welcome into the Bufab Group", says Jörgen Rosengren, Bufab's President and CEO.
"Bufab is known as a leader in the global C-parts industry and has the experience, international reach and scale that we have looked for in a partner. We are convinced that Kian Soon will benefit greatly from being part of Bufab, and that Bufab will enjoy advantages based on our network in South-East Asia. We very much look forward to our future together", comments Patricia Png, general manager at Kian Soon, and spokesperson for the current owners, the Png family.
The acquisition will be financed within Bufab's existing credit facilities. The purchase price, on an "enterprise value" basis, amounts to approximately SEK 85 million (8.5 million) upon closing of the transaction, which took place on 1st December 2017. An additional approximately SEK 25 million will be paid in 2019 conditional on a stable financial development. Finally, a performance-related purchase consideration of a maximum of SEK 20 million may be paid in 2021, conditional on an improved profit.
Kian Soon will report within Bufab's segment International.
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