KUALA LUMPUR: Chin Hin Group Berhad has signed a share sale agreement (SSA) to acquire a 65 per cent stake each in two data centre (DC) specialists for RM51.5 million.
In a statement today, the company said it will acquire 500,500 shares or 65 per cent stakes in Critical System Specialist Sdn Bhd (CSS) for RM41.2 million and 195,000 shares or 65 per cent of CSS Engineering & Construction Sdn Bhd (CSE) for RM10.3 million.
Chin Hin said CSS and CSE are pioneers in engineering, procurement, construction and commissioning (EPCC) of DC in Malaysia.
Their customers, it claimed, include some of the biggest names in the financial, telecommunications, logistics and supply chain sectors such as Bank Negara Malaysia, Starhub, Macquarie, DHL and NTT Communications.
Chin Hin group managing director Chiau Haw Choon said the proposed acquisitions, expected to be completed by the third quarter of 2024, will position the company as a leading player with distinct market advantages.
He expects clear profit visibility, supported by RM388 million in CSS' order book upon the completion of the transactions.
With CSS' 21 years of proven expertise in EPCC, he said Chin Hin is well-prepared to capitalise the booming growth in the data center sector.
"In addition, the proposed acquisitions offer significant synergies by leveraging our industrialised building system (IBS) capabilities and other core divisions.
"This will allow us to provide design, essential building materials, and construction services, thereby reducing construction time and enhancing cost efficiency across the entire DC market supply chain," he added.
According to Chiau, the proposed acquisitions also come with a cumulative profit guarantee amounting to RM12.39 million for 2023 and 2024.
Malaysia is emerging as a DC powerhouse in Southeast Asia and the region as demand surges for cloud computing and artificial intelligence (AI) services.
The country's high-growth DC market is expected to reach US$3.97 billion (RM17.5 billion) by 2029 from US$1.81 billion (RM8 billion) in 2023.
"One of the projects that we will be working on upon the completion of the acquisitions is the 15MW (megawatt) data centre in Johor which will provide cloud computing and AI services across the region," Chiau said.
Chin Hin will implement Starken reinforced wall panels, an IBS solution, for the construction of the DC in Johor that is expected to significantly accelerate the construction timeline, reduce costs and promote environmental sustainability.
Johor Bahru was named as the fastest growing DC market within Southeast Asia in DC Byte's 2024 Global Data Centre Index.