KUALA LUMPUR (April 24): Construction group Binastra Corporation Bhd (KL:BNASTRA) is buying a 40.8% stake in thermal energy firm LF Lansen Sdn Bhd for RM15 million cash — which comes with a call option for the group to up its interest to a controlling 51% — to expand into the energy-efficient engineering solutions sector.

The company announced that it has entered into conditional agreements with LF Lansen and one of its existing shareholders, Pee Chen Huan (PCH), for the transaction.

The acquisition will be fully funded through internally funds. Of the RM15 million, RM12.8 million will be used to subscribe for new LF Lansen shares — representing a 34.8% stake in its enlarged share capital, while RM2.2 million will be used to purchase 6% in LF Lansen from Pee.

Under the agreement, Binastra gets a call option to acquire an additional 10.2% equity interest in LF Lansen from Pee. This option can be exercised any time from the availability of LF Lansen’s audited financial statements for the year ending March 31, 2025 (FY2025), up to Dec 31, 2025.

The purchase price for this additional stake will be based on eight times LF Lansen’s FY2025 audited profit after tax (PAT), capped at a maximum RM8.7 million. If the call option is exercised, Binastra will gain a 51% controlling stake in LF Lansen.

Pee will be entitled to an earn-out payment of RM5.88 million annually if LF Lansen achieves a PAT of RM10 million for each of the financial years from FY2025 (ending March 31) to FY2027. This payment will be adjusted in proportion to LF Lansen’s actual PAT performance, subject to a minimum PAT of RM8 million and a maximum of RM12 million. The maximum total earn-out, payable over the three years, is capped at RM21.17 million or about RM7.06 million per year.

LF Lansen specialises in thermal energy storage (TES) systems for district cooling plants and buffer tanks for data centres. The company also provides engineering, procurement, construction, and commissioning services or EPCC for industrial ventilation, air-conditioning, and mechanical ventilation systems, primarily serving commercial and industrial buildings.

As at end-March 2025, LF Lansen had an outstanding order book of RM43 million. The company reported an audited profit after tax of RM2.1 million for the financial year ended March 31, 2024.

Through this acquisition, Binastra will gain immediate access to the expanding market for energy-efficient technologies — such as TES systems and buffer tanks — while also broadening its presence in the emerging data centre sector across Asean, according to managing director Datuk Jackson Tan Kak Seng.

“In line with the government of Malaysia’s energy efficiency initiatives, which are designed to lower operational costs, enhance energy consumption efficiency, increase competitiveness, and reduce the environmental footprint of Malaysia’s growing economy, as well as the expected continued growth in data centre development, LF Lansen is expected to benefit from such initiatives, considering its track record in providing TES systems for district cooling plants and buffer tanks for data centres, which will bode well for its future growth,” Tan noted.

“By incorporating these capabilities into our offerings, we will also enhance Binastra’s ESG [environmental, social, and governance] profile, which is increasingly seen as a priority for institutional investors,” he added.

Shares of Binastra closed down two sen or 1.12% at RM1.77 on Thursday, giving the company a market capitalisation of RM1.95 billion.