By Staff writer
Construction firm announces acquisition of AM Modular, a designer and manufacturer of prefabricated buildings
Saudi-based Red Sea Housing Services Company has announced the acquisition of AM Modular, Malaysia, a designer and manufacturer of prefabricated modular buildings.
The acquisition is Red Sea's first of its kind in Asia and marks a significant expansion in the geographic footprint of the company's operations, a statement said.
Under the terms of the agreement, the acquisition is valued at SR26.2 million ($7 million), which includes a down payment of SR11.2 million to be made this year, the statement said.
It added that the remaining SR15 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 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."
Rick Singh, managing director and CEO of AM Modular, added: "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."
Red Sea Housing Services said it expects its 2016 revenues to increase by over SR100 million following this acquisition which will be financed through existing facilities and internal cash flow.