GKE Corporation, the integrated warehousing and logistics solutions provider, will be acquiring a 100% stake in Fair Chem Industries for $12.5 million. The target company is an established specialty chemicals warehouse operator with tolling and specialty chemical manufacturing capabilities in Singapore.
This acquisition will help the group further strengthen its specialty chemicals storage and capabilities with a broadened customer base in the chemical sector.
This acquisition comprises premises with a gross floor area of approximately 8,766 sqm and a lease expiry in end April 2038, as well as machinery and equipment, and inventory related to the tolling and specialty chemical manufacturing business. The facility is fully equipped with a complete range of equipment and machinery capable of blending and manufacturing specialty chemicals and products according to customers’ specifications and formulations.
The way GKE sees it, this acquisition will benefit shareholders by enabling the group to acquire deeper technical expertise in the tolling and specialty chemical manufacturing business and capture a larger market segment of customers; presenting an opportunity for the group to acquire a profitable and established company; as well as further strengthening the group's core warehousing and logistics operations.
The group will satisfy the acquisition in cash through internal resources and bank borrowings. Upon completion of the acquisition, Fair Chem will become a 100%-owned subsidiary of GKE.
Neo Cheow Hui, CEO and executive director of GKE says, "Having built our chemical warehousing capabilities including dangerous cargo storage (Class 2, 3, 4, 5.1, 6.1, 8, and 9) over the last few years, the proposed acquisition opens the group to another level of growth with an established and stable business, as well as more storage space for specialty chemicals."
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Neo adds that this acquisition comes on the back of the group having been on the lookout for growth opportunities in its core warehousing and logistics business capabilities in Singapore, especially after our warehouses achieved optimal occupancy. With Fair Chem onboard, Neo believes that it could "potentially increase our warehousing storage space, broaden our business capabilities in the chemicals sector, and improve our financial performance".
Shares in GKE closed at 11 cents on Dec 21.
Photo: GKE Corporation
