XMH HOLDINGS last year made a 100% acquisition of Mech-Power Generator, a move that has proven to be highly positive for its top- and bottom-line.


“Z-Power is a sound brand name in the industry and is a valued partner in providing excellent solutions and quality products to the marine and offshore industries. The acquisition will allow XMH to leverage on Z-Power’s extensive technical knowledge to improvise on its current product range and add a fully complementary suite of products to the Group’s current range. This will allow the Group to extend a much more comprehensive package to its customers.” 

- Elvin Tan, Chairman & CEO of XMH Holdings (above)

This morning, XMH announced it has entered into a MOU for its second acquisition -- an 80% stake of Z-Power Automation. 

Following the release of the news, the stock price traded up 2 cents to 33.5 cents. 

Z-Power specializes in the assembly, retrofitting and manufacturing of type-tested switchboards, distribution panels, console, control systems, switchgears and other integrated marine automation products (see corporate video above). 

Apart from a handful of customers that are common to both companies, Z-Power will also provide XMH with significant exposure to a wider customer base to cross-sell its products.

The acquisition of Z-Power will also bring onboard the Niigata brand of main engines and propulsion systems for which Z-Power is an OEM, as well as the technical service and maintenance support.

This will further expand XMH’s suite of products which are synergistic to its core business of being a diesel engine, propulsion and power generating solution provider in the marine and industrial sectors. 

XMH said that Z-Power has consistently been profitable in the last few years, with the last reported financial year’s revenue coming in at S$21.4 million. No profit figure was given.

Z-Power_vendors8.14Z-Power vendors (L - R): Managing director Ang Cheng Siew, See Hoon and Tang Hing Yiu. Photo: CompanyThe purchase consideration of S$13.2 million (for an 80% stake) is similar in size to the S$17.45 million which XMH paid for a 100% stake in Mech-Power.

The Z-Power vendors will be paid in two tranches, with the first tranche of S$10.56 million to be paid shortly after the completion of the acquisition.

The second tranche of S$2.64 million is to be paid on the first year of the completion of the acquisition.
The vendors are listed company BH Global Corporation (which holds a 60% stake in Z-Power) and four individuals -- Ang Cheng Siew, See Hoon, Tang Hing Yiu and Tai Mui Foong.

The four will hold the remaining 20% stake and stay on at Z-Power for 3+3 years. 

Recent story: XMH: Insights into its generator-set production in Johor  

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