Southern Score buys 51% stake in SJEE Engineering for RM23mil

Southern Score Builders Bhd executive director and chief executive officer Gan Yee Hin

KUALA LUMPUR: Southern Score Builders Bhd has entered into a conditional share sale agreement (SSA) with Ngo Hea Bing for the acquisition of a 51% stake in SJEE Engineering Sdn Bhd for RM22.95mil cash.

The proposed acquisition entails the purchase by Southern Score of 1.27 million SJEE shares, representing 51% equity interest, it said in a filing with Bursa Malaysia.

SJEE is principally engaged in the business of electrical contractor and investment holding.

“This proposed acquisition, in short, is strategic, synergistic and earnings-accretive to the Group. Through SJEE, Southern Score can now capture the vast mechanical and electrical (M&E) job opportunities in the data centre space in Malaysia, opening up new market segment and expand our revenue stream,” executive director and chief executive officer Gan Yee Hin said in a separate statement.

“With the support and resources from Southern Score, SJEE can undertake larger scale M&E jobs, particularly in the data centre space and healthcare/hospital sector. It is currently bidding for a number of projects in Malaysia for both foreign multinational corporations and local principals. The vendor, who retains his 49%-interest in the company, will continue to drive the business forward.”

The proposed acquisition comes with a profit guarantee by the vendor that SJEE shall achieve a cumulative net profit profit of not less than RM15mil over three financial years.

“The proposed acquisition is earnings-accretive to the enlarged group given the attractive valuation of SJEE at nine times PE multiple, and backed by the profit guarantee. The vendor understands the value Southern Score brings and collectively, we can certainly scale up fast and grow SJEE to the next level,” Gan said.

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