SINGAPORE - Trading company Intraco is set to acquire 70 per cent of the share capital of fire protection specialist KA Group for $16.6 million.
KA Group comprises five companies: K.A. Building Construction, Firespray International (Singapore), K.A. Fireproofing, K.A. Fabric Shutters, and K.A. Firespray Sdn Bhd.
The one-stop provider of fire protection products was founded in 1987 and is both a manufacturer and applicator of such solutions.
Intraco said KA Group's double digit profit margins and strong business growth in the last three years, coupled with strong growth prospects, make it an attractive target.
Mr Foo Der Rong, Intraco managing director and chief executive officer, said: "KA Group provides the company an immediate entry point into the industry and serves as a good platform to further expand into other niche building related activities and products."
Intraco said it will pay the first $3.15 million of the consideration by issuing five million new shares at 63 cents each, representing about 4.8 per cent of the company's enlarged share capital.
The balance will be funded by the company's internal cash reserves.