SINGAPORE (Dec 13): Jubilee Industries, the provider of electronics components and plastic injection moulds, is acquiring Honfoong Plastics industries for $3.5 million, to broaden the group's revenue stream.

Incorporated in Singapore, Honfoong Plastics is engaged in the manufacture of plastic moulding, PCB assembly, tooling finishing and plastic precision engineering parts.

For the period from Jan 1 to Sept 30, Honfoong Plastics' net tangible asset was $2.38 million and it recorded a net profit before tax of $1.04 million.

Jubilee says Honfoong Plastics is expected to add significant top line and bottom line performance to Jubilee’s mechanical segment which comprises the precision plastic injection moulding as well as mould design and fabrication services.

The acquisition will also provide the group with its first direct medical supplies customer. Honfoong will also add sub-assembly and spray coating services to the group’s existing suite of mechanical manufacturing services.

Under the sale and purchase agreement, the consideration is made up on $1 million in cash and $2.5 million in about 55.6 million new shares in Jubilee -- or a 7.6% of the company's enlarged share capital -- at $4.5 cents each.

The group will be financing the cash portion through internal sources.

Terence Tea, non-executive chairman of Jubilee says, “For FY2018, we aim to increase our production capacity from the current 26 to 150 machines. This will be achieved by organically adding 32 new plastic injection moulding machines to our facilities in Johor Bahru, in addition to today’s acquisition of Honfoong’s 93 existing machines.”

Shares in Jubilee last traded at 4.1 cents on Tuesday.