KUALA LUMPUR (May 29): ASM Automation Group Bhd has opened applications for its initial public offering (IPO) on the ACE Market of Bursa Malaysia, aiming to raise up to RM30.91 million.

Priced at 17 sen per share, the IPO’s public issue of new shares will raise up to RM21.82 million for the company’s expansion plan, according to the prospectus issued on Thursday. The IPO will offer up to 34% stake in the company.

Application will close on June 19, and the company is scheduled for listing on July 2.

Founded as a provider for the food and beverage manufacturing sector, ASM Automation offers front-of-line processing and end-of-line packaging automation systems. Its services include machine modification and upgrades, maintenance support, and the supply of components and spare parts.

ASM Automation plans to allocate RM11.4 million, or over half the IPO proceeds, for the acquisition of a 70,000-square-feet land for the construction of a new factory. The company has yet to finalise the land acquisition, according to the prospectus.

Another RM2.3 million will be used to purchase operational machinery and build demonstration units, while RM2 million has been earmarked to strengthen its design and development team with additional staff.

Upon listing, ASM Automation is expected to be valued at RM90.91 million. The IPO price values the company at about 12 times its most recent earnings. For the financial year ended March 31, 2024, the company made a profit after tax of RM7.11 million, on revenue of RM39.13 million.

An offer for sale, meanwhile, will raise up to RM9.09 million, which will go entirely to its selling shareholders — managing director Chan Kok Heng and executive director Leong Weng Khin.

Currently, Chan is the largest shareholder with a 77.5% stake, while Leong holds 22.5%. Post-listing, Chan’s stakes will be diluted to 50.9%, and Leong stake will stand at 15.1%.

ASM Automation’s board is chaired by Tengku Faizwa Tengku Razif, an entrepreneur and member of the Selangor royal family, who also serves in similar roles at Manforce Group Bhd (KL:MFGROUP) and logistics firm KGW Group Bhd (KL:KGW).

Other directors also include independent non-executive director Datuk Thian Boon Chung, who also sits on the board of frozen seafood processor SBH Marine Holdings Bhd (KL:SBH).

M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter, and placement agent for the IPO, while Eco Asia Capital Advisory Sdn Bhd serves as the financial adviser.

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