Casa Holdings Limited Announces Major Acquisition: 80% Stake in Polybuilding (S) Pte. Ltd.

Key Highlights of the Announcement

• Casa Holdings Limited has entered into a Sale and Purchase Agreement (SPA) to acquire 80% of Polybuilding (S) Pte. Ltd. for an aggregate consideration of S\$13.2 million.
• The transaction is classified as both an “Interested Person Transaction” and a “Major Transaction” under the SGX Main Board Listing Manual, requiring shareholder approval at an Extraordinary General Meeting (EGM).
• The consideration will be paid via a combination of S\$8.58 million in new shares (65,000,000 shares at S\$0.132 each) and S\$4.62 million in cash.
• Upon completion, the vendors will continue to hold a 20% stake in Polybuilding, aligning their interests with both Polybuilding and Casa shareholders.
• The acquisition is expected to result in significant operational synergies, expanded market reach, and diversified income streams for Casa Holdings.
• Polybuilding is a specialist in natural stone and tiles supply, with subsidiaries in both Singapore and Malaysia, serving a broad client base including developers, architects, and homeowners.
• A preliminary independent valuation values Polybuilding at S\$15.1 million to S\$17.8 million, with a final report pending.

Details of the Acquisition

The acquisition involves purchasing 4,800,000 shares (80% of Polybuilding’s share capital) from three vendors: Dimi Pte. Ltd., Vistone Pte. Ltd., and Lim Soo Kong (an executive director and controlling shareholder of Casa Holdings).

Polybuilding is an established player in the supply and fabrication of natural stone and tiles, with a fully-equipped factory and specialized stone-processing machinery. It operates subsidiaries in Malaysia (Mypolybuilding Sdn. Bhd. and Casa Poly Builder Sdn. Bhd.) and Singapore (Polikon Pte. Ltd.).

Vendor breakdown: Mr Lim controls both Dimi and Vistone, and is a major shareholder in Casa Holdings, holding 28.57% prior to the transaction. The vendors’ willingness to take a substantial part of the consideration in Casa shares signals their confidence in the enlarged group and aligns their interests with Casa shareholders.

Rationale and Strategic Impact

• The Board believes the acquisition will expand Casa’s business footprint, diversify offerings, and create new revenue streams.
• It will strengthen operational capabilities and enhance competitive positioning, leveraging Casa’s existing resources and customer base.
• Expected synergies include enhanced efficiency, cost management, and market expansion.
• Polybuilding’s business is highly complementary to Casa’s existing operations, supporting long-term profitability and shareholder value.

Valuation and Financial Details

• The preliminary valuation
• Polybuilding’s book value
• The acquisition consideration (S\$13.2 million) is a mix of shares and cash:
  • S\$8.58 million via 65,000,000 new Casa shares at S\$0.132 each
  • S\$4.62 million in cash
• The new shares represent 30.98% of current Casa issued capital, and 23.65% post-acquisition.
• Shareholding changes: Mr Lim’s direct and indirect holding increases to 26.54% post-deal; Dimi and Vistone each gain 9.46%.
• Key Conditions Precedent: Due diligence, SIC whitewash waiver (exemption from mandatory general offer), shareholder approvals, SGX-ST approval, satisfactory valuation, independent financial adviser opinion, and completion of related party property disposals and debt settlements.
• Completion is targeted within three months post-EGM, subject to all conditions.
• Cash portion funded by internal resources; no external financing.

Financial Effects – Pro Forma

Net Tangible Asset (NTA) per Share:

• Before acquisition: S\$0.3113
• After acquisition: S\$0.2488

Loss per Share (LPS):

• Before acquisition: 0.63 cents
• After acquisition: 0.27 cents

Note: These figures are for illustration only and do not reflect future performance.

Regulatory and Shareholder Considerations

• The acquisition triggers a “major transaction” classification under SGX rules, as relative figures exceed 20% on several metrics.
• The issuance of consideration shares requires specific shareholder approval, as it exceeds general mandate limits.
• A Whitewash Waiver is being sought from the Securities Industry Council, as the vendors (Mr Lim and related parties) will breach the threshold for a mandatory general offer post-acquisition.
• RHT Capital Pte. Ltd. is appointed as independent financial adviser to assess fairness and reasonableness for minority shareholders.
• The deal is also an Interested Person Transaction (IPT) due to Mr Lim’s role as director and controlling shareholder. This means Mr Lim and his associates cannot vote on the approval resolutions.
• The Consideration for the Proposed Acquisition represents approximately 20.95% of Casa’s latest audited consolidated NTA.
• No other IPTs above S\$100,000 with these vendors in the current financial year.
• No new directors are proposed to be appointed in connection with the deal.

Shareholder Actions and Caution

• Shareholders will be asked to approve the deal at an EGM, including all related resolutions (IPT, major transaction, share issuance, Whitewash).
• A circular with full details and notice of EGM will be sent in due course.
• Copies of the SPA and Draft Valuation Report are available for inspection at Casa’s registered office for three months.
• Directors accept full responsibility for the accuracy and completeness of the announcement.
• Further announcements will be made as material developments occur.
• Caution: There is no certainty the acquisition will complete. Shareholders are advised to exercise caution and consult professional advisers as needed.

Potential Impact on Share Price

This acquisition is significant and potentially price-sensitive for several reasons:

• Major Transaction: The size and nature of the deal will materially alter Casa’s business, bringing new operational capabilities and revenue streams.
• Large Share Issuance: The consideration shares represent a substantial dilution, but align interests of vendors and Casa shareholders.
• Strategic Diversification: Entry into a complementary sector with established business and assets may be viewed as positive for Casa’s long-term growth and competitiveness.
• Interested Person Transaction: Related party nature and regulatory scrutiny may impact investor confidence depending on the IFA’s conclusions and the final valuation.
• Financial Effects: While NTA per share decreases due to the share issuance, loss per share improves, and Polybuilding’s profitability may bolster Casa’s future results.
• Regulatory Approvals: Completion is subject to multiple conditions, including shareholder approval, SIC waiver, and SGX-ST in-principle approval.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Shareholders and investors should review official documents, consult the forthcoming circular, and seek advice from their financial advisers before making any investment decisions. There is no assurance that the proposed acquisition will be completed, and all information is subject to change based on regulatory and shareholder approvals.

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