Oil and gas services company KNM Group Bhd entered into three sale and purchase agreements to buy 80% stakes in Brazilian companies HZM Industrial Ltda, HZM Servicos Ltda and HZM S A Industria e Comercio de Equipmentos for a total of RM55.3 million cash.
KNM first announced its intention to acquire stakes in the Brazilian companies last December but asked for an extension earlier this month.
The acquisition is being concluded via two of its wholly-owned units, KNM International Sdn Bhd and KNM Process Systems Sdn Bhd, taking over the equity from three individuals — Joao Ronaldo Pereira, Jose Maria Vieira de Novaes and Rozimiro Ferreira Lopes.
The three companies specialise in areas such as fabrication of steel structures, pressure vessels and stainless steel plates for engineering, procurement and construction contracts, and assembly, erection and maintenance of industrial plants.
“The proposed acquisition will allow KNM to enhance its presence through the design and manufacturing of process equipment for the oil, gas, petrochemicals and minerals mining industries, and enables KNM to have immediate manufacturing capacity in Brazil, access to clients in the oil, gas, petrochemicals and minerals mining industry and enhance its presence in South America,” KNM said in an announcement.
The acquisition is expected to contribute positively to KNM’s earnings for FY2008. The vendor’s original cost and dates of investment in HZM are not publicly available.
For the first three months of FY2008, KNM posted a 41% jump in net profit to RM54.1 million on the back of a 26% rise in revenue to RM331.2 million, compared to a year earlier.
KNM’s shares had been actively traded over the past few days. Yesterday, the stock closed at RM1.55, a gain of nine sen, with 2.3 million shares changing hands.
