Powerwell to expand presence in Sarawak via acquisition

SHAH ALAM (Dec 30): Powerwell Holdings Bhd has entered into conditional share sale and purchase agreements to acquire a 49 per cent equity interest in Tenaga Kenari Sdn Bhd (TKSB) and Tenaga Kenari Marketing Sdn Bhd (TKMSB) for a total cash consideration of RM16.7 million.

In a statement, the group said it will pay RM12.5 million for the stake in TKSB and RM4.2 million for TKMSB.

The vendors are Ling Soon Kiong, Tian Nyan Fatt, Ting Ing Houng and Lee Joon Kian.

Managing director Catherine Wong Yoke Yen said the proposed acquisition supports Powerwell’s expansion into East Malaysia by providing immediate access to new customers, industries and projects.

She said the move would also broaden the group’s product portfolio while strengthening its engineering capabilities and competencies.

“The combination of Tenaga Kenari’s bespoke engineering capability and scalable production supports sustainable growth and recurring business opportunities.

“This synergistic move aligns with the group’s 5-pillar growth strategy and builds on our mergers and acquisitions initiatives, following the acquisition of Firerex in April this year, which has started to contribute positively to the group,” she said in a statement on Monday.

Under the agreement, the vendors have provided a profit guarantee that Tenaga Kenari will achieve a cumulative profit after tax of RM12 million over three financial years.

Based on a valuation of RM34 million and an average annual profit after tax of RM4 million, the transaction implies a price-to-earnings multiple of about 8.5 times.

Wong added that the acquisition is expected to be earnings accretive and will effectively expand Powerwell’s production capacity, with Tenaga Kenari serving as an extension of the group’s facilities.

“By combining Tenaga Kenari’s established customer base and deep industry and local experience with Powerwell’s execution capabilities and financial backing, we will be able to undertake larger projects in East Malaysia together.

“Ultimately, this will further strengthen our position as the leading homegrown power distribution specialist,” added Wong.

The proposed acquisition is targeted for completion by March 31, 2026, barring any unforeseen circumstances.

Established in 1994, Tenaga Kenari is an electrical engineering company specialising in the design and manufacture of customised electrical switchgear and control-gear assemblies.

With an in-house engineering team and more than 80 skilled personnel, Tenaga Kenari has delivered over 150 projects across sectors such as semiconductor, high-tech manufacturing, utilities, infrastructure, petrochemical and renewable energy.

Most of its projects are in Sarawak, with aggregate contract values exceeding RM100 million over the past decade.

The company also operates dedicated production lines for standardised electrical enclosures, including low-voltage current transformer cabinets, high-tension meter cabinets and residential low-tension meter cabinets, supplying Sarawak Energy Bhd.