KUALA LUMPUR (Oct 27): Precision-machined parts maker CPE Technology Bhd (KL:CPETECH) is acquiring a factory property in Ulu Tiram, Johor, for RM14.5 million to expand its manufacturing capacity, marking its second property acquisition in the area in less than three months.
Its wholly owned subsidiary Champion Precision Technology Sdn Bhd (CPT) had entered into a sale and purchase agreement with Logitech Engineering Solutions Sdn Bhd for the acquisition, the group said in a bourse filing on Tuesday.
The property, located in Taman Perindustrian Gemilang, comprises a double-storey factory and a three-storey office building on approximately 0.4081 hectares (1.01 acres) of land.
CPE Technology said the acquisition would provide additional space near its existing factories to accommodate new manufacturing lines as part of its expansion plans.
"The proposed acquisition is in line with the long-term strategy of CPE and its subsidiaries to strengthen its manufacturing and industrial capabilities, as well as expand production capacity," it said.
The acquisition will be funded using proceeds raised from the company's initial public offering (IPO). CPE Technology was listed on Bursa Malaysia's Main Market on Dec 7, 2023, after raising RM179.58 million from its IPO at RM1.07 per share, with part of the proceeds earmarked for expanding its manufacturing facilities.
CPT manufactures precision-machined parts and components using computer numerical control (CNC) turning and milling technology, besides providing related machining services.
CPE Technology expects to complete the acquisition by the third quarter of its financial year ending June 30, 2027 (FY2027).
The latest acquisition follows CPE Technology's announcement in August that it was acquiring a 0.99-acre industrial property with a factory building, also in Ulu Tiram, for RM10 million, alongside RM21.02 million worth of machinery to support its production expansion.
Together, the two property acquisitions bring CPE Technology's planned investment in factory properties in Ulu Tiram to RM24.5 million, or RM45.52 million including the machinery purchases announced in August.
Shares of CPE Technology closed up thee sen or 2.27% at RM1.35 on Tuesday, giving the company a market capitalisation of RM906.27 million. Year to date, the counter is up 154.72%.