KUALA LUMPUR: GFM Services Bhd (GFM) has completed the acquisition of university asset concessionaire, KP Mukah Development Sdn Bhd (KPMD), from Kumpulan Parabena Sdn Bhd (KPSB) for RM122.5 million.
Following the completion of the acquisition, KPMD is now a wholly-owned subsidiary of GFM, said the integrated facilities management service provider in a statement today.
KPMD holds a 23-year concession awarded by the government and Universiti Teknologi Mara (UiTM) which entailed three years of the design and construction of UiTM Mukah campusin Sarawak and 20 years for the provision of facilities management services ending 2035.
The strategic acquisition of KPMD would allow GFM to move up the value chain andwiden its scope from being a facilities management services provider into a full-scalebuild, lease, maintain and transfer concession holder, said Managing Director Ruslan Nordin.
“The addition of KPMD’s estimated outstanding order book of RM1.2 billion will further boost GFM’s order book of RM281.2 million, as at Sept 30, 2018,” he said, adding that the acquisition was expected to be earnings-accretive as KPMD reported a net profit of RM17.7 million for the financial year ended 31 December 2016.
“We will be entitled to KPMD’s recurring future earnings for the remaining 17 years,improving the group’s long-term earnings visibility.
“The consolidation of KPMD’s financial performance is expected to positively impact GFM’s earnings in the financial year 2018 and the remaining years of the concession, ending FY2035,” said Ruslan.
On the funding for the acquisition, he said GFM had completed its private placement exercise, successfully raising gross proceeds of RM18.9 million, with the issuance of 42.8 million new GFM shares.
“The proceeds will be utilised to part finance the purchase consideration of RM122.5 million andthe balance of the purchase price will be satisfied by internal funds and bank borrowings,” he added.