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Thursday, August 21, 2014

XMH Holdings to acquire 80% stake in Z-Power Automation


XMH Holdings, the diesel engine provider for the marine and industrial sectors, said the group has signed a Memorandum of Understanding (MOU) to acquire an 80% equity stake in Z-Power Automation from BH Global Corporation and vendors Ang Cheng Siew, See Hoon, Tang Hing Yiu and Tai Mui Foong.

Z-Power is the provider of automation services and total solutions in the design and manufacturing for the marine and offshore industry. Z-Power specialises in the assembly, retrofitting and manufacturing of type-tested switchboards, distribution panels, console, control systems, switchgears and other integrated marine automation products. Z-Power is also a leading provider of major shipyards and ship owners in the Asean region for new builds, conversion and retrofitting projects.

Under the terms of the agreement, the purchase consideration of $13.2 million will be paid in two tranches, with the 1st tranche of $10.56 million to be paid shortly after the completion of the acquisition and the 2nd tranche of $2.64 million to be paid on the first year of the completion of the acquisition.

The purchase consideration of $13.2 million represents 80% of the share capital of ZPower, with the remaining 20% held by the four individual vendors, with the exception of BH Global Corporation.

Under the terms of the MOU, the four individual vendors will remain with Z-Power for a period of six years and continue to extend their expertise to the group.

XMH said the acquisition will enable the group to tap Z-Power’s technical knowledge and capabilities and gradually incorporate them into XMH’s control systems and switchboards in marine applications. Z-Power will also provide the group with significant exposure to a wider customer base, providing XMH with a platform to further cross-sell its now expanded range of products.

The acquisition of Z-Power will also bring onboard the Niigata brand of main engines and propulsion systems, of which Z-Power is an OEM for the brand, as well as the technical service and maintenance support for the brand, further expanding XMH’s suite of core products.

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