BMG Greentech Bhd has made a strategic move to strengthen its position in the clean energy sector by acquiring a majority stake in Plus Xnergy Holdings Sdn Bhd (PXH) for RM110 million. This acquisition will leverage PXH's expertise and portfolio to expand BMG's influence and capabilities in the renewable energy market.
Details of the Acquisition
BMG formalized its acquisition by issuing 81.48 million new BMG shares at RM1.35 per share to the shareholders of PXH. This transaction secures a controlling interest in PXH, ensuring that QL Resources Bhd, BMG's parent company, holds at least 51% equity in the newly expanded entity.
Large scale solar farm installation
Since its listing in 2013, PXH has significantly expanded its portfolio, boasting over 400 megawatt-peak (MWp) of solar photovoltaic capacity which generates approximately 2,000 gigawatt-hours (GWh) of clean energy as of March 2024. With a focus on clean energy engineering, procurement, and construction (EPC) services, along with asset development, PXH is a valuable addition to BMG's existing operations.
The acquisition includes an earn-out feature that guarantees PXH's continued financial health and profitability, ensuring that BMG's investment is sound and positioned for growth. This strategic partnership between BMG and PXH is expected to create synergies that will enhance both companies' capabilities in providing comprehensive clean energy solutions.
Synergies and Growth Prospects
The acquisition of PXH by BMG holds significant strategic implications, particularly in terms of synergies and growth opportunities within the clean energy sector. PXH's expertise in EPC services for clean energy projects will allow BMG to expand its renewable energy production capabilities, offering a more diverse range of end-to-end solutions to its clients.
With PXH's successful track record of building over 400 MWp of solar capacity and generating more than 2 billion-kilowatt hours of clean energy, BMG is poised to strengthen its competitive position in the renewable energy market. The integration of PXH's capabilities will enable BMG to streamline operations, reduce costs, and optimize project timelines, ultimately improving its financial performance in both the short and long term.
BMG's ability to leverage PXH's existing market relationships and geographical reach positions the company well for future expansion. As the global renewable energy market continues to grow, BMG is set to capitalize on these opportunities, further solidifying its presence in the industry and expanding its market share.
Market Response and Future Outlook
The market's response to the acquisition has been overwhelmingly positive. Following the announcement, BMG's stock price surged by 15%, reaching RM1.96 per share. This increase reflects investor confidence in the acquisition and the potential value it will bring to BMG. In addition to the acquisition, BMG plans to inject up to RM50 million in equity capital to further expand PXH's operations and footprint in the clean energy sector.
The acquisition of PXH is a significant milestone for BMG. It not only strengthens the company's position in the renewable energy sector but also aligns with its long-term goal of promoting sustainable development through clean energy solutions. By integrating PXH's technology and expertise, BMG can explore innovative ways to produce cleaner energy at a lower environmental cost, positioning the company as a leader in the industry.
With Bloomberg New Energy Finance (BNEF) reporting a record $303.5 billion invested in renewable energy in 2023 alone, global interest in clean energy solutions continues to surge. BMG's strategic acquisition of PXH positions the company to capitalize on this growing demand. This move underscores BMG's commitment to sustainability and its vision of driving the transition to a greener future.