KUALA LUMPUR (Oct 26): Semiconductor equipment maker Edelteq Holdings Bhd (KL:EDELTEQ) plans to invest RM15.3 million for a controlling 51% stake in Nixma Technology (M) Sdn Bhd, as it seeks to expand its factory automation capabilities and diversify its earnings base across more industrial sectors.

In a bourse filing on Monday, Edelteq said it has entered into agreements with Nixma's three shareholders — Tan Yean Chong, Mathew Perera and Lim Poh Chuan — to acquire a 15% stake in the company for RM4.5 million cash and subscribe for new shares representing a further 36% stake for RM10.8 million.

Upon completion, Nixma will become a 51%-owned subsidiary of Edelteq while the three existing shareholders will collectively retain the remaining 49%.

Edelteq, through its subsidiaries, provides engineering support for integrated circuit assembly and testing processes in the semiconductor industry, including automated equipment solutions.

Meanwhile, Penang-based Nixma, incorporated in 2017, specialises in the design and assembly of factory automation equipment, including robotic systems, leak detection equipment, precision engineering solutions and automated assembly and testing systems.

Its customers span several industries, including semiconductors, electronics, automotive, defence, life sciences, medical equipment and water processing.

Edelteq said the investment would strengthen its position in the semiconductor equipment and factory automation sectors by expanding its technical capabilities, product offerings and access to multinational customers.

"It also provides opportunities for cross-selling, business expansion and operational synergies.

"The proposed investment is further expected to broaden the group’s earnings base, enhance operational efficiency through resource sharing and economies of scale, and support its long-term strategic growth and succession planning," the group said.

The investment, it added, is also expected to reduce its reliance on its existing semiconductor-related businesses while providing opportunities to enter new industrial segments.

Of the RM15.3 million investment, RM10.8 million from the subscription of new shares will go directly to Nixma to finance its expansion plans, including the construction of a new factory, purchase of industrial land or acquisition of existing factory premises.

Edelteq said the investment will be financed through internally generated funds and bank borrowings, with the final funding mix to be determined later.

Under the agreement, Nixma's existing shareholders have guaranteed that the company will achieve an audited net profit of at least RM6 million for the financial year ending Dec 31, 2026.

Should Nixma fall short of the target, the three shareholders will be required to compensate the company for the difference.

The RM15.3 million investment values Nixma at approximately RM30 million, representing a price-to-earnings multiple of five times based on the guaranteed profit of RM6 million.

Nixma recorded a profit after tax (PAT) of RM3.35 million on revenue of RM29.42 million for the financial year ended Dec 31, 2025, compared with a PAT of RM2.04 million on revenue of RM22.79 million a year earlier.

Its net assets stood at RM15.53 million as at end-2025.

The existing management team will continue overseeing Nixma's daily operations following the investment, with key personnel required to remain with the company for at least five years.

Edelteq will be entitled to appoint up to two directors to Nixma's three-member board while the existing shareholders may appoint one director.

The proposed investment, which does not require Edelteq shareholders' approval, is expected to be completed by the fourth quarter of 2026.

Shares in Edelteq closed up 1.5 sen or 3.66% at 42.5 sen on Monday, giving the group a market capitalisation of RM248.96 million. Year to date, the counter has risen by more than 28%.