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Artroniq acquires precision engineering company for RM12 million
Published:  Jul 19, 2022 9:01 AM
Updated: 1:01 AM

Bursa Malaysia ACE Market listed Artroniq Berhad (“Artroniq” or “Company” or “Group”) has entered into a conditional sale and purchase agreement (“CSPA”) to acquire 60% equity interest in precision engineering company – Fujim Digital Sdn Bhd (“FDSB”) for RM12 million (“Proposed Acquisition”). 

The Proposed Acquisition comes with a profit guarantee of not less than RM2.1 million for each period of 1 May 2022 to 30 April 2023 and 1 May 2023 to 30 April 2024, respectively. 

Artroniq’s Managing Director and Chief Executive Officer Mr Chin Yew Thong (曾耀堂) said, “We are looking forward to the completion of the acquisition of Fujim, which will put us into the precision engineering business. The proposed acquisition will help the Group to reduce the reliance on a single business and provide a new income stream as we aim to participate in the robust growth of the engineering supporting services industry.”

Currently, the ICT business is Artroniq’s sole revenue contributor following the cessation of the operations in the manufacturing business of resin compounds for wire and cable and resin compound for other industries on 22 September 2020. 

Left: Artroniq's Managing Director and Chief Executive Officer Mr Chin Yew Thong; Right: Fujim Digital Sdn Bhd shareholder Mr Teoh Boon Thiam

“The alternative income stream for the Group will help to rejuvenate the recovery in the post-COVID era for Artroniq. I am optimistic that the shareholders share similar excitement as the management on the potential of the high precision machineries industry, and vote in favour of the Proposed Acquisition during the upcoming extraordinary general meeting (“EGM”),” Chin said. 

A filing with Bursa Malaysia today shows that the Proposed Acquisition, which entails the acquisition of 156,000 ordinary shares in FDSB from Teoh Boon Thiam, will be satisfied via RM6 million cash and balance via issuance of new ordinary shares of the Company. At the same time, Artroniq is also proposing to diversify its existing principal activities to include precision engineering. The proposed diversification is required following the proposed acquisition to facilitate the Group’s venture into the new business. 

FDSB is a Penang-based company involved in precision engineering, particularly in trading, manufacturing, and design of jigs and fixtures, precision tooling components, machinery parts, and related products, and research and development with mechanical suppliers. It provides one-stop fabrication solutions from design to production, equipment tools, and support to satisfy assembly needs.

FDSB shareholder Mr Teoh Boon Thiam (张渂添) said, “We believe this Proposed Acquisition will help accelerate the company's expansion plan. The precision engineering industry has a robust growth outlook and will see huge demand as the global economy recovers from the pandemic.”

As a key supporting industry to the manufacturing sector, the outlook of precision engineering is positive with its strong demand. FDSB currently supports various industries such as the information technology, semiconductor, and automotive industries. The company has a wide customer base, including both the local and international market. 

In July 2022, FDSB was included as an approved vendor to tender for new contracts with 3 multinational companies operating in the automotive (China), lighting (Europe), and semiconductor and microchip industries (the US).

Going forward, FDSB is also looking to expand its product offerings to cater to customers operating in the oil & gas industry. This will allow the Group to tap into a wider customer base and create a more sustainable income stream.

This content is provided by Aegis Communication Sdn Bhd.

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