Envictus International Holdings Announces Proposed Acquisition of Factory and Warehouse in Selangor, Malaysia

Key Highlights

• Major Asset Acquisition: Envictus International Holdings Limited (“Envictus” or “the Company”) announced its indirect wholly-owned subsidiary, Pok Brothers Sdn. Bhd. (“Purchaser”), has entered into a Sale and Purchase Agreement (“SPA”) on 19 January 2026 to acquire a factory and warehouse property in Selangor, Malaysia.
• Purchase Consideration: The agreed price for the property is RM68 million (approximately S\$21.56 million), notably below the independent valuation of RM71 million, reflecting a discount to market value and potential value accretion for the Group.
• Property Details: The property comprises industrial land (10,119 sq m) with a detached factory and warehouse (gross floor area: 11,169 sq m), located at No. 7, Jalan Tiang U8/93, Seksyen U8, Shah Alam, Selangor.
• Vendor and Transaction Structure: The vendor is SMG Land Sdn. Bhd., a wholly-owned subsidiary of Star Media Group Berhad (listed on Bursa Malaysia). The transaction was concluded on an arms-length basis after considering independent valuation and market factors.
• Funding: The acquisition will be financed through a mix of internal resources and bank borrowings.
• Strategic Rationale: The property will be used for the Group’s trading and frozen food business segment, as well as food services and dairies segments. It is expected to centralize operations, replacing multiple leased facilities, thereby improving operational efficiency and supporting future growth.

Important Information for Shareholders

• Material Transaction Under SGX Rules: The transaction is classified as a “discloseable transaction” under Rule 1006(c) of the SGX Listing Manual, as the consideration is 19.0% of the Company’s market capitalization. Shareholders’ approval is NOT required for the Proposed Acquisition.
• Impact on Financials:
  • Net Tangible Assets (NTA): No impact on NTA per share (remains at RM 0.653).
  • Earnings: Pro forma earnings per share will decrease from RM 0.099 to RM 0.093, mainly due to depreciation, loan interest, and offset by rental savings (~RM2 million).
  • Gearing: Gearing ratio increases from 0.48x to 0.77x as borrowings rise from RM108.8 million to RM175.4 million due to the acquisition financing.
• Risk Factors: Completion of the transaction is subject to several conditions precedent, including regulatory approvals and confirmation from the Ministry of Economy (MOE) and state authorities. If conditions are not met within the specified period (3-4 months), either party may rescind the SPA, and the deal may not proceed.
• Operational Impact: The acquisition is expected to result in significant operational benefits by centralizing warehousing and logistics, potentially improving margins and supporting scalability.
• No Director/Shareholder Conflict: None of the Directors or controlling shareholders have any direct or indirect interest in the transaction beyond their respective shareholdings.
• Document Availability: SPA and Valuation Report are available for inspection by shareholders at the registered office for three months.
• Price Sensitivity: The acquisition, being at a discount to market value and offering operational benefits, could be viewed positively by the market. However, the increased gearing and slight EPS dilution may be scrutinized by investors mindful of balance sheet strength and profitability.
• Cautionary Note: As the deal is not yet completed and subject to regulatory and other approvals, investors should exercise caution. There is no certainty that the acquisition will be completed.

Detailed Transaction Terms

• Deposit Structure: RM200,000 (Earnest Deposit) was paid prior to SPA; RM6.6 million (Balance Deposit) upon SPA signing; RM61.2 million balance payable within 30 days of conditions precedent being satisfied or by 22 April 2026, whichever is later.
• Termination Clauses: If Purchaser breaches SPA or payment terms, Vendor may terminate and forfeit the deposit. If Vendor breaches SPA, Purchaser can terminate and recover all monies paid.
• Conditions Precedent:
  • Shareholders’ approval (if required)
  • MOE written confirmation (no approval required)
  • State authority approval under Section 433B of National Land Code
  • Interest of 8% per annum is payable to Vendor if conditions are not met within 3 months (extendable to 4 months if shareholders’ approval is required)

Strategic Rationale and Outlook

• The acquisition aligns with Envictus’ strategy to enhance supply chain efficiency, reduce rental costs, and support business expansion in Malaysia’s food services sector.
• Centralized warehousing is expected to improve logistics, service reliability, and facilitate scaling to meet growing customer demands.
• Potential for improved margins and long-term growth, despite short-term impact on EPS and higher gearing.

Investor Advisory

Shareholders and potential investors are advised to monitor further announcements for updates on regulatory approvals and completion. As the transaction is material and could have long-term strategic and financial impacts, it may influence the share price. However, the outcome remains subject to successful completion and integration.

Disclaimer

This article is prepared for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult their financial advisers before making investment decisions. The completion of the acquisition is subject to regulatory approvals and other conditions, and there is no assurance of completion at this stage.

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