Logistics firm GKE Corporation plans to buy out TNS Ocean Lines, which provides prime mover drivers and crane operators at port terminals here.
GKE, which moves containers from one yard to another for import and transshipment, said the proposed $9 million acquisition would strengthen its position in port management services at the Tanjong Pagar terminal.
The deal to buy all of TNS involves payment of $2.7 million in cash, with the remainder to be raised by issuing 52.5 million new shares priced at 12 cents each.
"TNS is a strategic lateral expansion for GKE to extend our existing logistics services to the maritime logistics sector, particularly in port operations," said GKE chief executive Neo Cheow Hui.
"The company will complement GKE's services and widen our portfolio of services. This proposed acquisition aligns with GKE's objectives to broaden and strengthen our earnings base, offering a steady stream of income and profits. It will enhance shareholder value."
TNS is a strategic lateral expansion for GKE to extend our existing logistics services to the maritime logistics sector, particularly in port operations.
GKE CHIEF EXECUTIVE NEO CHEOW HUI
GKE has a market capitalisation of around $67.1 million. It posted $36.8 million in revenue for the 12 months to May 31, along with net profits of $5.7 million - a reversal from the net loss of $3.8 million recorded in the previous year.
Mr Neo said TNS has offered $3.5 million in profit guarantees over the next three years.
He noted that GKE is also looking at opportunities in the region.
GKE shares closed down 0.8 cent at 9.8 cents yesterday.