Pelikan in talks to buy China rivals

PELIKAN International Corp Bhd, a stationery maker, is in talks to buy two Chinese rivals for an estimated US$200 million (RM632 million), its top official said.One is a stationery firm, while the other is involved in hardcopy, or the making of toners and printer cartridges. The companies rake in an annual revenue of more than US$300 million (RM948 million) collectively."To grow our business by 40 per cent to 50 per cent, we need to do M&A (merger and acquisition). We have already engaged investment bankers for this purpose," its chief executive officer Loo Hooi Keat said."We are actively pursuing China. We want a presence in the domestic market in China to merge and grow our business," he told reporters yesterday at a briefing in Subang, Selangor, to mark Pelikan's 170th anniversary.
Loo, who said that Pelikan could pay about US$100 million (RM316 million) for each company, expects the deal to be completed next year.Pelikan's hardcopy business contributes some 40 per cent of total revenue, while its stationery business provides it with a high gross margin of 60 per cent.In the financial year ended December 31 2007, Pelikan's revenue surged 82 per cent to RM1.19 billion largely as a result of the purchase of Pelikan Hardcopy Holding AG.Net profit rose 23.5 per cent to RM93.04 million from RM75.3 million.Loo also said that Pelikan may buy the 80 per cent stake it does not own in a Colombian company that has annual sales of US$20 million (RM63 million).The exercise, scheduled to be completed in the current quarter, could cost between US$6 million and US$8 million (RM19 million and RM25 million).-www.btimes.com.my