KUALA LUMPUR: Kitchen cabinet manufacturer Signature International Bhd plans to acquire a 23.67 per cent stake in Fiamma Holdings Bhd for RM180 million.

Fiamma is principally an investment holding company, while its subsidiaries are principally involved in trading and services, property development and investment holding and property investment.

Signature said it had entered into a conditional share sale agreement (SSA) with Fiamma major shareholder Lim Choo Hong.

The company is buying 120 million shares representing the 23.67 per cent stake at RM1.50 per share.

"On a separate note, Divine Inventions Sdn Bhd, a private entity controlled by Datuk Seri Chiau Beng Teik's family, entered into a SSA with Lim to purchase 30 million ordinary shares or 5.92 per cent equity interest in Fiamma at RM1.50 per share."

Collectively, Signature and Divine Inventions will own a total of 29.59 per cent stake in Fiamma upon completion of the acquisition.

Signature said the transaction was expected to be completed within four months from the date of the SSA and would be funded via a combination of internally generated funds and bank borrowings.

Signature managing director Chiau Haw Choon said the proposed acquisition was in line with its objective of acquiring strategic stakes in profitable companies within the industry supply chain for future growth.

Chiau said Fiamma and its subsidiaries' main business  which is home and kitchen electrical appliances, owned many respectable in-house brands such as Elba, Faber, Rubine, Tuscani and Haustern. 

"We have observed exciting prospects in this company, which has seen a significant uptick in demand for its products due to the Covid-19 pandemic. 

"The impact of various movement restrictions imposed has led to a change in the home appliance consumption trends, as more people spend time indoors, seek to increase the quality of their lifestyle at home, and gain more interest in cooking and baking. 

"This has in turn resulted in the increase in demand for electrical household products and accordingly increased the sales in Fiamma's trading and services segment," he said.