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Ever Glory United acquires fire protection services business for base amount of $4.2 mil

Felicia Tan
Felicia Tan • 2 min read
Ever Glory United acquires fire protection services business for base amount of $4.2 mil
Fire-Guard Engineering is a sub-contractor that specialises in fire protection services.
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Ever Glory United has agreed to acquire Fire-Guard Engineering for a base consideration of up to $4.2 million.

Fire-Guard Engineering is a sub-contractor that specialises in fire protection services. It also provides services including design, supply, installation, testing, commissioning and maintenance of fire protection systems with a Building and Construction Authority (BCA) grading of L5 which has a tendering limit of $16 million.

A sale and purchase agreement (SPA) was entered into with Fire-Guard Engineering and its shareholders, Low Chin Ban, Chee Teow Siong, Lim Teck Seng, Wong Wen Hsing and Chee Yen Ming on Jan 17.

As at Jan 18, Low, Teow Siong, Lim, Wong and Yen Ming hold respective stakes of 20.0%, 30.0%, 21.5%, 4.0% and 24.5% in Fire-Guard Engineering. Teow Siong is currently the managing director and co-founder of Fire-Guard Engineering. Low is Teow Siong’s wife and is also a director in the company.

Under the SPA, the base consideration is payable in three tranches. The first tranche of $1.65 million will be fulfilled in cash.

Ever Glory will also issue 4.13 million ordinary shares in its company at an issue price of 40 cents per share (amounting to $1.65 million) once several conditions – including approvals from the boards of both parties – have been met.

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The last tranche will be fulfilled in cash of up to $450,000. The remaining balance will be satisfied via the issue and allotment of up to 1.13 million shares at 40 cents apiece.

The acquisition will be completed three business days after the last of the conditions have been met. The cash portion of the acquisition will be funded through Ever Glory’s internal resources and net proceeds from its initial public offering (IPO) in May 2023.

As at March 31, 2023, Fire-Guard’s net asset value (NAV) stood at $2.33 million. Its order book as at Oct 31, 2023, stood at $15 million.

See also: Allianz offers $40.58 per Income share, representing premium of 37.3% over NAV

Based on Fire-Guard’s unaudited management accounts, its net profit after tax for the 10-month period from Jan 1, 2023, to Oct 31, 2023, was $1.64 million.

As at 10.48am, shares in Ever Glory are trading flat at 37 cents on Jan 17.

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