KUB Malaysia Bhd, in a strategic move to diversify its revenue streams and bolster its position as a comprehensive power solutions provider, has announced its plan to acquire an 86.65% stake in Central Cables Bhd (CCB) for a total consideration of RM119.42 million. The transaction will be executed through the issuance of shares priced at RM0.60 each to JAG Capital Holdings and is expected to culminate in a mandatory general offer for the remaining CCB shares at RM2.60 per share.
The acquisition is designed to integrate KUB Power Sdn Bhd more deeply into cable manufacturing, allowing KUB Malaysia Bhd to enhance its service offerings within the electrical infrastructure sector. This move comes at a time when CCB has reported a significant rise in after-tax profit for the fiscal year 2023, jumping to RM11.65 million from RM2.03 million in the previous year, largely due to an increase in customer orders.
Simultaneously, KUB has seen its first-quarter profits nearly double, thanks in part to gains from asset disposal. However, it has also experienced a decrease in overall revenue within a highly competitive economic environment that is expected to persist.
The acquisition aligns with KUB's broader strategy of mitigating market fluctuation risks and is anticipated to strengthen its portfolio by leveraging CCB's manufacturing capabilities. The offer for the remaining shares of CCB puts the company's valuation at RM137.82 million, reflecting confidence in CCB's growth trajectory and potential synergies with KUB Power Sdn Bhd's existing operations.
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