ACO GROUP TO RAISE RM16.2 MILLION FROM IPO FOR FUTURE EXPANSION
Kuala Lumpur, 27 February 2020 – ACO Group Berhad (“ACO Group” or “the Group”), a distributor of electrical products and accessories, has successfully launched its prospectus in conjunction with its initial public offering (“IPO”) on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
ACO Group distributes a total of 88 brands of electrical products and accessories, comprising 85 third party brands and 3 own brands. The Group also has a lighting concept store, namely “UR Home Light”, in Johor Bahru. Out of all the third party brands, ACO Group is an authorised distributor for 10 brands of electrical products and accessories that include Schneider Electric, KDK, Hager, Omron, ABB, Panasonic, Ledvance, Maxguard, Siemens and Yaskawa.
ACO Group’s Group Managing Director, Ir. Tang Pee Tee @ Tan Chang Kim (陈章锦) said, “We are delighted to move a step ahead in our quest to be a listed company on Bursa Securities. We are optimistic that the listing exercise will allow us to further strengthen our foothold in the industry as it enables us to gain access into the capital markets to fuel our expansion plans.”
“We currently serve the market in Peninsular Malaysia where our market reach extends from our base in the Southern region of Peninsular Malaysia, namely Johor and Melaka, to cover the Central region including Kuala Lumpur and Selangor. Moving forward, our focus is to further expand our presence by entering new markets and adding more retail touch points across Peninsular Malaysia.”
“Over the next two years, we will be setting up a new head office and distribution centre in Johor, as well as adding seven new sales outlets and two distribution centres in other towns within Johor as well as in new markets such as Negeri Sembilan, Kelantan, Terengganu, Pahang and Pulau Pinang.”
The Group will also be growing its “UR Home Light” lighting concept store with two more outlets, one each in Kuala Lumpur and Johor Bahru to tap into opportunities in the building and construction industry including renovation and interior fit-outs segment of the market.
Meanwhile, the Group is focused on enhancing customers’ convenience and buying experience. The Group will be widening its product range of third-party brands and own brands products in addition to upgrading its enterprise resource planning system and two online ordering systems. This will enable customers to view product specifications, stock availability and pricing of products. Furthermore, to expand its in-house logistics fleet, is the Group will be purchasing three additional trucks to support its growing operations.
From the IPO exercise, ACO Group will be raising approximately RM16.2 million from its Public Issue, of which RM4.2 million or 25.9% of total proceeds would be used to set up new sales outlets and concept store, RM2.5 million (15.4%) for the set up of new head office and distribution centre in Johor, RM2.0 million (12.3%) to purchase new trucks and upgrade Information Technology (“IT”) system, RM4.2 million (26.1%) for working capital and RM3.3 million (20.3%) for estimated listing expenses.
In terms of financial performance, the Group’s revenue grew from RM114.5 million in the financial year ended 28 February 2017 (“FY2017”) to RM134.4 million in the financial year ended 28 February 2019 (“FY2019”), representing a two-year compound annual growth rate (“2-year CAGR”) of 8.3%. Profit after tax (“PAT”) rose from RM4.5 million in FY2017 to RM 7.4 million in FY2019, at a 2-year CAGR of 29.0%.
ACO Group’s IPO exercise entails a public issue of 58.0 million new shares, representing 19.3% of its enlarged share capital, and an offer for sale of 25.0 million existing shares in the following manner:-
• Public issue of 58.0 million new shares:-
• • 15.0 million new shares available for the Malaysian public;
• • 9.0 million new shares available for eligible Directors, employees and persons who have contributed to the success of the Group;
• • 4.0 million new shares by way of private placement to identified investors;
• • 30.0 million new shares by way of private placement to Bumiputera investors approved by the Ministry of International Trade and Industry.
• Offer for sale of 25.0 million existing shares by way of private placement to identified investors.
Pursuant to the launch of ACO Group’s prospectus, applications for the Public Issue are open today and will close on 6 March 2020 at 5.00 p.m. ACO Group is scheduled to be listed on the ACE Market of Bursa Securities on 18 March 2020.
Upon listing on the ACE market, ACO Group will have market capitalisation of RM84.0 million based on the issue price of RM0.28 and its enlarged share capital of 300.0 million shares.
Alliance Investment Bank Berhad is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.
Photo caption (from right to left):
• Dr. Teh Chee Ghee (郑志毅), Independent Non-Executive Director of ACO Group
• Ir. Dr. Ng Kok Chiang (黄国将), Independent Non-Executive Director of ACO Group
• Mr. Tee Kok Wah (郑国华), Head/Senior Vice President of Corporate Finance of Alliance Investment Bank Berhad
• Mr. Mahesh P Rupawalla, Chief Executive Officer of Alliance Investment Bank Berhad
• Mr. Yap Koon Roy (叶坤来), Independent Non-Executive Chairman of ACO Group
• Ir. Tang Pee Tee @ Tan Chang Kim (陈章锦), Group Managing Director of ACO Group
• Madam. Jin Siew Yen (袁秀英), Promoter and substantial shareholder of ACO Group
• Mr. Sean Tan Yushan (陈煜山), Executive Director of ACO Group
• Madam. Chai Poh