04 April 2016Red Sea Housing Services
Co. has acquired AM Modular Sdn Bhd, Malaysia, a leading designer and manufacturer of prefabricated modular buildings. The acquisition is Red Sea Housing Services' first of its kind in Asia, and marks a significant expansion in the geographic footprint of the Company's operations.
Under the terms of the agreement, the complete acquisition is valued at SR26.2 million ($7 million), which includes a down payment of SR11.2 million ($3 million) to be made this year. The remaining SR15 million ($4 million) will be made over the next three-year period for a total of 90 percent of AM Modular's shares.
Don B. Sumner, Acting CEO of Red Sea Housing Services Co., said: "Our acquisition today of AM Modular serves as a catalyst for Red Sea Housing Services' expansion in the Southeast Asian market. It also fits perfectly into our innovation strategy, thanks to the unconventional construction technology that AM Modular brings to the table. This unique technology will enable Red Sea Housing to create high quality structures up to 12 floors high, with rapid turnaround times and using less manpower."
Sumner added "this is an excellent opportunity for us to continue driving the Red Sea Housing growth strategy along with our new colleagues at AM Modular, while maintaining our technological superiority delivering increased value to our customers and shareholders with this acquisition."
Rick Singh, Managing Director and CEO of AM Modular, said "this acquisition will allow the exponential growth of Red Sea in the Australasian Region. Our strong presence in Malaysia will enable faster delivery to all Red Sea clients and offer a greater range of product," he said.
Red Sea Housing Services expects its 2016 revenues to increase by over SR100 million following this acquisition. The deal will be financed through existing facilities and internal cash flow. The acquisition will be made by the Company's subsidiary based in Dubai.
© The Saudi Gazette 2016