Hing Yiap to buy 6 entities from Asia Brands (7722)

Hing Yiap Group Bhd is acquiring six entities from Asia Brands Corporation Bhd for RM245 million.

The
six companies are Anakku Sdn Bhd, Audrey Sdn Bhd, Mickey Junior Sdn
Bhd, Asia Brands Global Sdn Bhd, Asia Brands Assets Management Sdn Bhd
and Asia Brands HR Services Sdn Bhd.

The purchase consideration
is to be satisfied by cash of RM179.3 million with the balance of
RM65.7 million to be satisfied via the issuance of 30,137,615 new
ordinary shares of RM1.00 each in Hing Yiap at an issue price of RM2.18
per share.

Hing Yiap entered into a conditional share sale agreement with Asia Brands Corp on July 11, 2012.

In
a filing to Bursa Malaysia today, Hing Yiap said the main rationale for
the acquisition is because the company is in the same apparel trading
and retailing businesses as Asia Brands Corp.

"The proposed
acquisitions are expected to result in synergistic effects on the
performances of the enlarged Hing Yiap Group via savings realised
through the enlarged networks of customers, consolidation of
operations, elimination of duplicate resources within the enlarged
company and the potential increase in
efficiency and effectiveness of its marketing and distribution channels.

"The
effects of the aforementioned synergies are expected to improve the
revenue and profitability in Hing Yiap. "Besides the greater economies
of scale, the enlarged entity also expects to
benefit from the increased and larger market share in the apparel trading and retailing businesses," Hing Yiap said.

It
added that with a larger market share, the company will increase its
customer and supplier base, enhance its product range to cater to a
diversified customer base, and sustain competitive advantages in the
apparel trading and retailing businesses.

"The proposed
acquisitions will also complement and enhance the product variety of
the enlarged Hing Yiap Group with the babies' and children's wear, care
and related products as well as the intimate women's apparel market
segments.

"It will enable Hing Yiap to create an immediate
strong presence in the market for babies' and children's wear, care and
related products as the subject companies carry the home-grown brand
'Anakku' which has been established for more than 30 years in Malaysia.

"The
proposed acquisition would also allow the Hing Yiap Group to diversify
its operations to include marketing and distribution of intimate
women's apparel through its new ownership of another home-grown brand,
'Audrey'," the company said.

According to Converging
Knowledge's independent market research report dated Jan 1, 2012 (IMR
Report), the Anakku brand commands the largest market share of the
domestic babies' apparel market at an estimated 28.1 per cent (by
revenue) and ranks number one in terms of number of points-of-sale in
Malaysia.

The report also ranks the Audrey brand second (by
revenue) in its business line with the highest number of points-of-sale
in Malaysia. -- Bernama

opps ... suspended liao

+1

:D

+1 :D