Karyon Industries Bhd is strengthening its manufacturing and industrial operations through the proposed acquisition of a freehold industrial property in Bandar Seri Alam, Johor, for RM8.61 million in cash.

Through its wholly owned subsidiary, Hsing Lung Sdn Bhd, the company has signed a sale and purchase agreement with Tanah Temasik Sdn Bhd to acquire approximately 3,587 sq m of freehold industrial land together with a detached factory located at Jalan Masai Lama, Bandar Seri Alam. The property is currently used as a factory and storage facility.

The purchase price was negotiated on a willing buyer-willing seller basis and is supported by an independent market valuation of RM8.8 million, indicating that Karyon is acquiring the asset slightly below its appraised market value.

The acquisition will be financed through a combination of RM2.61 million in internally generated funds and RM6 million in bank borrowings, allowing the group to preserve part of its cash while leveraging external financing.

According to Karyon, the acquisition supports its long-term growth strategy by providing additional production space for both existing and future manufacturing lines, while also increasing warehouse capacity. The property's close proximity to the group's existing facilities is expected to improve operational efficiency and facilitate future expansion.

Although the acquisition is not expected to have a material impact on earnings, net assets or share capital for the financial year ending March 31, 2027, management expects it to contribute positively to the group's earnings over the longer term as production capacity expands.

The transaction is not a related-party transaction, does not require shareholder or regulatory approvals, and is expected to be completed by the fourth quarter of 2026.

Key Takeaways

• Karyon is investing RM8.61 million to acquire a freehold industrial land and factory in Bandar Seri Alam, Johor.
• The purchase price is below the independent valuation of RM8.8 million, suggesting a fair acquisition.
• Funding comprises RM2.61 million from internal funds and RM6 million through bank borrowings.
• The acquisition supports Karyon's manufacturing expansion by increasing production and storage capacity.
• The property's location near the group's existing operations is expected to improve operational efficiency and support future growth.
• While the immediate financial impact is expected to be minimal, the new facility is anticipated to enhance the group's long-term earnings potential through expanded manufacturing capabilities.