MAIN Market-listed Sabah beverage manufacturer Life Water Bhd has inked a share sale agreement to acquire a 90% equity interest in the Hung Tai Group for a total purchase consideration of RM46.8 mil.
Founded in 1995, the Hung Tai Group comprises three Sabah-based companies: Hung On Thong Mini Supermarket Sdn Bhd, Hung Tai Enterprise (Sabah) Sdn Bhd and Kilang Mee Ban Soon Sdn Bhd.
With nearly three decades of operating history, the group has grown into an established food manufacturing, wholesale and trading business serving customers across Sabah, Labuan, Sarawak and Brunei.
The transaction marks a deliberate strategic step to transform Life Water from a predominantly beverage-focused manufacturer into a diversified fast-moving consumer goods (FMCG) group.
By acquiring established downstream capabilities – spanning the manufacture of sauces, condiments, noodles and red bean paste alongside wholesale distribution and trading – Life Water immediately strengthens its presence along the food value chain.
Strategically, this acquisition de-risks the group’s expansion by securing an established operating platform thereby bypassing the long gestation periods and execution uncertainties typically associated with greenfield developments.
Sustainable long-term growth
Complementing the earlier acquisition of Twinine Sdn Bhd, this move accelerates Life Water’s revenue diversification, expands its consumer reach and creates meaningful operational synergies across logistics and distribution networks.
“It’s a privilege to witness the realisation of our diversification aspirations as Hung Tai Group formally joins the Life Water family,” enthused Life Water’s managing director Liaw Hen Kong.
“This marks more than an expansion of our business portfolio – it represents the beginning of a broader consumer platform that combines complementary strengths, enhances our capabilities and positions the group for sustainable long-term growth.”
With both groups operating within the fast- FMCG sector and sharing complementary distribution channels, logistics infrastructure and customer networks across East Malaysia, Life Water foresees bright opportunities ahead as the enlarged group leverages their combined strengths
“We expect to enhance operational integration, expand market reach and unlock cross-selling opportunities across a broader consumer product portfolio,” envisages Liaw
“We believe this strategic move positions Life Water for sustainable long-term growth and continued value creation for our shareholders.”
The RM46.8 mil consideration for the 90% stake implies a 100% equity value of RM52.0 mil which represents a disciplined investment valued at approximately 6.8 times the Hung Tai Group’s audited after tax profit for the financial year ended Dec 31, 2025.
To protect shareholder value, the transaction is supported by a two-year profit guarantee, a retention sum, vendor warranties and indemnities.
Furthermore, Lai Jia Hui – a key management member instrumental to the target’s growth – will retain a 10% equity stake and continue in his current role for a minimum of five years post-completion.
The proposed acquisition will be funded through a combination of internally generated funds and bank borrowings.
Life Water approaches the transaction from a position of financial strength; the group posted a revenue of RM172.98 mil and a net profit of RM30.02 mil for its financial year ended June 30, 2025.
As of end-March 2026, the group maintained a net cash position by holding approximately RM99.9 mil in cash and short-term funds against a low gearing ratio of 0.41 times alongside RM44.9 mil in operating cash flow generated over the nine-month period.
This robust financial capacity ensures the transaction can be completed without undue strain on the group’s liquidity.
Subject to the fulfilment of conditions precedent and all applicable regulatory approvals, the proposed acquisition is targeted for completion by October 2026.
At the close of today’s (July 15) market trading, Life Water was up 7 sen or 4.73% to RM1.55 with 2.43 million shares traded, this valuing the company at RM733 mil. – July 15, 2026
