KUALA LUMPUR: Powerwell Holdings Bhd
is set to expand into East Malaysia via the proposed acquisition of 49% stakes in Tenaga Kenari Sdn Bhd and Tenaga Kenari Marketing Sdn Bhd, for a combined purchase consideration of RM16.7mil.
The group entered into conditional shares sale and purchase agreements with Ling Soon Kiong, Tian Nyan Fatt, Ting Ing Houng and Lee Joon Kian to acquire the stakes, which it said will provide it with "immediate access to new customers and industries while expanding its product portfolio, capabilities, and competencies".
According to Powerwell's announcement, Tenaga Kenari is a Sarawak-based power distribution specialist serving various industries including semiconductor, high-tech manufacturing, utilities, infrastructure, renewable energy and petrochemical.
The proposed acquisition comes with a profit guarantee by the vendors that Tenaga Kenari shall achieve a cumulative profit after tax (PAT) of RM12mil for three financial years.
Powerwell said the total purchase consideration translates into an implied price-to-earnings multiple (PE) multiple of 8.5 times based on the valuation of Tenaga Kenari of RM34mil and average PAT of RM4mil per annum.
Powerwell managing director Catherine Wong Yoke Yen said the combination of Tenaga Kenari’s bespoke engineering capability and scalable production supports sustainable growth and recurring business opportunities.
“In addition to the strategic synergies, the proposed acquisition is expected to be earnings accretive.
"It is also expected to expand our capacity by serving as an extension of Powerwell’s production facilities. By combining Tenaga Kenari’s established customer base and deep industry and local experience with Powerwell’s execution capabilities and financial backing, we will be able to undertake larger projects in East Malaysia together. Ultimately, this will further strengthen our position as the leading homegrown power distribution specialist," said Wong.
The proposed acquisition is expected to be completed by March 31, 2026, barring any unforeseen circumstances.
