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KUALA LUMPUR (Bernama) -- Kumpulan Powernet Bhd (KPower) today signed a share sale agreement with Sabaka Group Sdn Bhd to acquire 2.19 million shares, or a 51%, in Sabaka’s wholly-owned unit, Chemtrax Sdn Bhd for RM10 million.

In a statement today, KPower group managing director Mustakim Mat Nun said the proposed acquisition was consistent with the vision and intention of the company to explore the logistics segment upon the emergence of the new shareholders a year ago.

"Through this acquisition, we can immediately leverage on Chemtrax’s decades of experience, expertise and its existing network with multinational companies to further expand and complement KPower’s and its major shareholders’ activities," he said.

Headquartered in Pasir Gudang, Johor, Chemtrax is principally involved in the provision of chemical and gas transportation and forwarding services. It has logistics facilities with depots and yards in Pasir Gudang and Simpang Renggam, Johor and Kuantan, Pahang.

Founded in 1998, Chemtrax has over 22 years of experience handling and specialising in transportation of hazardous materials and also specific materials used in the manufacturing of nitrile gloves between Malaysia and Singapore.

Its fleet consists of 93 units of trucks, tanks, prime movers, barrels and trailers to service clients that are mainly multinational companies with high requirements and safety standards.

Chemtrax is also heavily involved in the transportation of synthetic latex and nitrile butadiene rubber, which are key ingredients for latex gloves, and KPower is expecting Chemtrax to benefit from the surge of demand for latex gloves across the world due to the COVID-19 pandemic.

"We are also happy that we are able to somewhat contribute to the fight and containment of the COVID-19 pandemic via our acquisition of Chemtrax.

"The increase in demand for nitrile gloves has also resulted in a spike in demand for the specialised services of Chemtrax. We give our full commitment to support the expansion of the fleet to service the needs of these glove manufacturers.

"It is estimated that we will need an additional 15 units of these specialised vehicles,” Mustakim said.

The audited earnings before interest, taxes, depreciation and amortisation (Ebitda) of Chemtrax as at financial year ended Dec 31, 2019 (FYE 2019) stood at RM5.80 million.

Sabaka has guaranteed that the aggregate Ebitda of Chemtrax in FYE 2020 and FYE 2021, based on the business forecast, would not be less than RM10.0 million or RM5.0 million for each FYE.

Based on the 51 per cent equity interest to be acquired by KPower, the contribution to KPower would be RM2.55 million for FYE 2020 and FYE 2021, based on the Ebitda guarantee.

"With the Ebitda guarantee as provided under the terms of the proposed acquisition, we expect the proposed acquisition would be immediately yield-accretive and provide long-term sustainability to the company’s revenue and profitability,” Mustakim added.

https://www.thestar.com.my/business/business-news/2020/10/21/kpower-buys-51-stake-in-logistic-firm-chemtrax

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