Propel Global group chief executive officer Angeline Lee
KUALA LUMPUR: Propel Global Bhd
has entered into a conditional share sale agreement to acquire a 51% stake in Best Wide Engineering (M) Sdn Bhd (BWE) for RM7.82mil.
The oil and gas support services provider said BWE is an oil and gas engineering firm. Its shareholders are Azizi Alias with 45.8% equity interest, Jasniazrin Shah Mohd Hata with 44.2% equity interest and Tan Siew Lee with 10.0% equity interest.
Propel is acquiring the 51% stake from Azizi, who is selling his entire equity interest, and Tan, who is selling 5.2% of his holdings.
As part of the share sale agreement, Propel has also entered into a put and call option agreement with Jasniazrin and Tan that requires the company to purchase up to 49.0% of the remaining equity interest in BWE from them and, Jasniazrin and Tan will grant Propel Global the right during the call option period that requires them to sell up to 34.0% equity interest in BWE to the company.
According to Propel, BWE has 15 ongoing contracts with a total unbilled contract value of RM21.8mil expected to be realised over the next three years, is guaranteeing a profit of RM2.4mil and RM2.6mil in profit after tax (PAT) for the financial year ended Nov 30, 2022 (FY22) and FY23 respectively.
BWE reported revenue of RM18.6mil and PAT of RM178,000 for FY19; RM19mil revenue and RM395,000 PAT for FY20 and; RM38.5mil revenue and RM2.3mil PAT for FY21.
Currently, BWE has a tender book of RM41.3mil.
“The acquisition is in line with the group’s strategy to grow the O&G business through expanding our offerings and enhancing market presence as an O&G engineering services provider. BWE’s expertise and experience in EPCC works complement the group’s existing O&G business,” Propel group chief executive officer Angeline Lee said in a statement.
“We believe that combining the core competencies of BWE with the group would enable the latter to bundle a wider range of service offerings to its customers and provide it with a competitive edge over competitors. The group will also be able to tap into BWE’s existing customer base for cross-marketing opportunities and additional revenue stream,” she added.
