Neo Group has acquired a 51% stake in Ye Liang How Catering Service, an earnings-accretive move, for S$4.4 million. The strategy of growth via acquisitions was mentioned by Chairman Neo Kah Kiat at the AGM in July: "Every year, I will try to acquire one or two catering companies. The targets would be 'smaller' ones for now and we take a selective and cautious approach towards the bigger M&As." (See: @ NEO GROUP's AGM: 5 takeaways (aside from sumptuous lunch!) Neo Kah Kiat, Chairman and CEO of Neo Group. Vimeo screenshot With roots that trace back to 1991, How’s Catering has risen to become one of the more renowned food caterers in Singapore that focuses on serving corporate clientele. How's Catering’s other offerings include catering for thematic and festive events, weddings as well as healthier-choice gourmet spreads.

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The acquisition will be funded by a combination of cash amounting approximately S$3.6 million and the issuance of 877,193 new shares at S$0.57 per share.

Additionally, an earn-out consideration of approximately S$0.3 million will be payable, if How’s Catering’s aggregate consolidated net profit before tax for the financial period from 1 April 2018 to 31 March 2019, financial year ended 31 March 2020 and financial year ended 31 March 2021 is more than S$4.0 million.

Mr. Neo Kah Kiat, Founder, Chairman and CEO of Neo Group Limited, said: “This acquisition allows us to expand our customer base as well as promote cross-selling opportunities.

"Furthermore, our extensive procurement and logistics network should yield a number of operational synergies and drive positive impact to our financial performance.

"As our food catering business remains the main growth driver, we are confident that the expertise and track record of How’s Catering’s experienced management team should propel us to strengthen our current suite of catering brands. This will also enable us to build a steady platform to pursue inorganic opportunities for food catering as well as our other business segments in the future.

"That said, we will continue to adopt a prudent and disciplined approach when prospecting for potential targets with the objective of driving bottom-line growth.’’