Property developer, Chin Hin Group Berhad announced that it has entered into a share sale agreement to acquire 65% equity interest in Critical System Specialist Sdn Bhd and CSS Engineering & Construction Sdn Bhd for RM51.5 million.
CSS and CSE are pioneers in engineering, procurement, construction and commissioning (EPCC) of data centers (DC) in Malaysia. The companies' customers 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 will position Chin Hin as a leading player with distinct market advantages. We anticipate 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, we are well-prepared to capitalize on the booming growth in the data center sector.
The proposed acquisitions also come complete 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 2023.1"One of the projects that we will be working on upon the completion of the acquisitions is the 15MW data center in Johor which will provide cloud computing and AI services across the region," Chiau added.
Under the SSA with CSS' shareholders, Chin Hin is to acquire 500,500 shares or 65%equity interest in CSS for RM41.2 million.
Meanwhile, Chin Hin also struck a deal with CSE's shareholders to acquire 195,000 shares or 65% equity interest in CSE for RM10.3 million.
The group said the proposed acquisitions will be funded via a combination of internally generated funds and bank borrowings and are expected to be completed by the third quarter of 2024.
