BMG Greentech Bhd has taken a strategic step to strengthen its position in the clean energy sector, acquiring a majority stake in Plus Xnergy Holdings Sdn Bhd (PXH) for RM110 million. This move leverages PXH’s expertise and portfolio to expand BMG’s capabilities in the renewable energy market.
Details of the Acquisition
BMG finalized the acquisition by issuing 81.48 million new shares at RM1.35 per share to PXH shareholders. This transaction secures a controlling interest in PXH and ensures BMG’s parent company, QL Resources Bhd, holds at least 51% equity in the newly expanded entity.
Large scale solar farm installation
Since its 2013 listing, PXH has built a significant portfolio with over 400 megawatt-peak (MWp) of solar photovoltaic capacity. As of March 2024, this generates approximately 2,000 gigawatt-hours (GWh) of clean energy. PXH’s focus on clean energy engineering, procurement, and construction (EPC) services and asset development makes it a valuable addition to BMG’s operations.
The acquisition includes an earn-out feature designed to guarantee PXH’s continued financial health, ensuring BMG’s investment remains sound and positioned for growth. This partnership is expected to generate synergies, enhancing both companies’ ability to provide comprehensive clean energy solutions.
Synergies and Growth Prospects
The move creates significant synergies and unlocks growth opportunities within the clean energy sector. PXH’s expertise in EPC services will allow BMG to expand its own renewable energy production capabilities and offer a more diverse range of end-to-end solutions to its clients.
By integrating 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. The integration of PXH’s capabilities will also allow BMG to streamline operations, reduce costs, and optimize project timelines, ultimately improving its financial performance.
BMG can now tap into PXH’s existing market relationships and geographical reach, positioning the company for future expansion. As the global renewable energy market grows, BMG is well-positioned to capitalize on these opportunities, solidify its industry presence, and expand its market share.
Market Response and Future Outlook
The market’s response to the acquisition has been overwhelmingly positive. Following the announcement, the BMG Greentech share price surged by 15% to RM1.96 per share, reflecting strong investor confidence in the deal’s potential value. BMG also plans to inject up to RM50 million in equity capital to further expand PXH’s operations and footprint in the clean energy sector.
This acquisition is a significant milestone for BMG Greentech Bhd. 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. By integrating PXH’s technology and expertise, BMG can explore innovative ways to produce cleaner energy at a lower environmental cost, solidifying its position as an industry leader.
Global interest in clean energy solutions continues to surge, with Bloomberg New Energy Finance (BNEF) reporting a record $303.5 billion invested in renewable energy in 2023 alone. BMG’s strategic acquisition of PXH positions it to capitalize on this growing demand, underscoring its commitment to sustainability and its vision of driving the transition to a greener future.
