KUALA LUMPUR: Puncak Niaga Holdings Bhd is buying over the business of construction firm TRIplc Bhd for RM210 million to enhance its construction segment's revenue and long-term growth prospects.
TRIplc, according to Puncak Niaga's bourse filing announcing the proposed acquisition today, holds two concessions awarded by the government and Universiti Teknologi MARA (UiTM).
This, said Puncak Niaga, means the group will be gaining immediate access into a profitable construction firm.
"Puncak Niaga believes the proposed acquisition will contribute positively to the financial performance of the construction segment of the Puncak Niaga Group as the service concessions (comprising both the facilities maintenance services of Zone 1 Phase 2 (“Z1P2”) and the construction and facilities management services of Zone 1 Phase 3 (“Z1P3”) of UiTM Puncak Alam Campus) are expected to contribute accretive growth to the Puncak Niaga Group," it said.
The proposed acquisition comes on completion of the disposal of its water companies — Puncak Niaga (M) Sdn Bhd and Syarikat Bekalan Air Selangor (Syabas) — to the Selangor government for RM1.55 billion, last October.
The move also comes amidst Puncak Niaga's right sizing of its oil and gas sector due to the current low oil price environment, and as it exits the water business in China.
Under the deal, Puncak Niaga will buy over TRIplc's entire issued and paid-up share capital from Pimpinan Ehsan Bhd.
Pimpinan Ehsan is a new investment holding company that will be taking over TRIplc's listing status on the Main Market of Bursa Malaysia after a proposed internal reorganisation at TRIplc, which will see TRIplc becoming a wholly-owned unit of Pimpinan Ehsan.
To effect the internal reorganisation, TRIplc has proposed a share exchange with Pimpinan Ehsan, which will see the shares of the company exchanged on a one-to-one basis with new Pimpinan Ehsan shares of RM1 each.
Puncak Niaga will fund the the proposed buy via internal funds and/or borrowings, the breakdown of which it has yet to determine.
The group expects the proposed acquisition will be completed by the second half of 2017, subject to relevant regulatory approvals having been obtained.
Puncak Niaga's shares lost half sen to close at 90 sen today, valuing it at RM402.52 million. TRIplc's shares, on the other hand, gained 5 sen to settle at RM2.03, valuing it at RM137.56 million. Year to date, the stock has gained 62.4%.