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| Source: Neo Group. From left: Neo Kah Kiat, Founder, Chairman and CEO of Neo Group, Lim Boon Chay, Chairman and Managing Director of Thong Siek Food Industry. |
Neo Group (梁苑集团有限公司), which has catering subsidiaries including the halal Orange Clove, restaurant chains, and a gift subsidiary, has made its first major acquisition since its listing in line with the Group’s value proposition as a fully-integrated catering solutions provider. The acquisition of Thong Siek (TS) Holdings, whose Dodo subsidiary produces halal food products, is synergistic with its core businesses, providing a vertical integration process enabling the Group to expand into manufacturing and reap economies of scale, Neo Group said.
The S$7.35 million proposed acquisition is of a 55% equity stake in TS Holdings, a major manufacturer, distributor and retailer of surimi-based seafood products such as the DoDo brand of fish balls, crabsticks and other surimi-based products through two production facilities operating in Senoko, Singapore, and Johor Bahru, Malaysia. TS Holdings' products are sold in Singapore and Malaysia, and distributed across 22 countries worldwide including in Asia Pacific and the Middle East.
The acquisition is part of the Group’s transformation to offer turnkey catering solutions with its comprehensive suite of brands and service offerings within three business pillars – food catering, food retail as well as food and catering supplies – to capture various market segments. Neo Kah Kiat (梁佳吉), Founder, Chairman and CEO of Neo Group, said: “This upstream acquisition is in line with our value proposition as a fully-integrated catering solutions provider, enhancing our supply chain and providing a vertical integration process that will expand our manufacturing business."
“TS Group’s businesses in the manufacture and sale of seafood-based products are complementary to our businesses and offer a good value proposition. We will be able to leverage on TS Group’s expertise in food manufacturing to streamline and further strengthen our new central kitchen’s operations for higher quality consistency while reaping economies of scale and synergies with our core businesses following the integration and streamlining of processes.
“The acquisition will also allow the Group to create new business-to-consumers income streams, expand our customer base and market segments, while giving us access to a large distribution network across 22 countries globally.”
Following the acquisition, TS Holdings intends to deepen its existing footprint in Singapore and Malaysia by intensifying marketing efforts and reaching out to the Malay community through its halal product lines. It also intends to expand into new markets such as Hong Kong. TS Holdings also seeks to revitalise the DoDo brand of frozen foods and introduce a premium line of products to cultivate a new customer segment reaching out to hotels, restaurants and cafes.
Neo will assume the role of Acting CEO of TS Holdings and Xenn Lim, General Manager, Corporate Services of TS Group, will become Deputy CEO of TSH.