Tomypak shareholders approve RM73.5mil acquisition of EB Packaging

KUALA LUMPUR: Tomypak Holdings Bhd has received its shareholders’ nod for the acquisition of a 70% stake in EB Packaging Sdn Bhd by its wholly owned subsidiary Tomypak Flexible Packaging Sdn Bhd for RM73.5mil.

In a statement, Tomypak, which is involved in flexible food packaging, said its shareholders also approved the call and put options for the remaining 30% equity interest of EB Packaging at a maximum of RM31.5mil.

Tomypak believes this strategic expansion via the acquisition of an established player in the flexible plastic packaging sector, aligns with the group’s strategy centred on bolstering revenue and profitability.

“By doing so, we aim to expand our footprint vertically within the flexible plastic packaging sector. This decision is rooted in the recognition that our group and EB Packaging both cater to different customer bases,” it said.

Tomypak’s customers are predominantly food and beverage manufacturers.

In contrast, EB Packaging engages with a diverse clientele spanning across various industries including food, electronics, industrial packaging, building materials, furniture, garment, healthcare, and logistics.

“This divergence in customer bases presents a unique opportunity for mutual growth and synergy, capitalising on each other’s strengths, brand identities, and track records,” Tomypak added.

Furthermore, the group also aims to achieve significant cost reductions and improvements in operational efficiency through the consolidation of cost synergies, covering the procurement of raw materials and common support services.

With the acquisition, the group also aims to reduce its vulnerability to potential risks linked to EB Packaging’s financial performance.

It said the promoters will remain in charge of EB Packaging’s operations for an additional three years.

Tomypak expects their expertise and dedication to sustain and potentially improve EB Packaging’s performance, ensuring business and management continuity.

“EB Packaging’s consistent profitability over the past three financial years underscores its suitability as a strategic fit for our group’s next chapter of growth. The acquisition is expected to contribute positively to the future earnings and cash flows of our enlarged group,” the statement concluded.