Cahya Mata Sarawak Berhad subsidiaries Cahya Mata Oiltools Sdn Bhd and Oiltools International Sdn Bhd entered into four conditional sales and purchase agreements with Scomi Energy Services Berhad to acquire Scomi Oilfield Ltd together with various companies and assets within the Oilfield Group of Companies for a total purchase consideration of RM21 million.
CMS adds the proposed expected to be completed by the third quarter of 2022, represent a strategic investment with potential synergy with the group’s existing businesses as well as the opportunity to diversify into the global energy sector.
Scomi Energy, via the Oilfield Group, is one of the top five global providers of drilling support services and products for the oil and gas industry. It offers drilling fluids services and drilling waste management services. It has a presence in 15 markets across Asia, the Middle East, Europe, and Africa with an ongoing order book.
The CMS management expects to leverage Oilfield Group’s global presence to expand the Group’s clientele and serve as a bridge for the expansion of its existing businesses into the markets where the Oilfield Group has a presence.
This will be an opportune time for CMS to diversify into the global energy sector as it finds potential for Oiltools to become an important contributor to the group from the increase in overall drilling activities due to increased demand for oil and gas as well as the restructuring of the global energy supply chain.
The first SPA is for the acquisition of Oilfield and its nine subsidiaries as well as a 48% equity interest in Scomi KMC Sdn Bhd from Scomi Energy for a cash consideration of RM13.5 million. The second SPA involves Oiltools International acquiring from Scomi Oiltools Sdn Bhd a 4% equity interest in Scomi KMC, 25% equity interest in Scomi Oiltools Gulf W.L.L. and 25% equity interest in Continental Wire Cloth (Malaysia) Sdn Bhd a cash consideration of RM2.6 million. Through the first and second SPAs, Oiltools will hold 52% equity interest in Scomi KMC.
The third SPA is for the acquisition of a 5-storey shop office located in Dataran Prima, Petaling Jaya, Selangor by Oilfield International from SOSB while the fourth SPA is for Oilfield International’s acquisition of the inventory and equipment from SOSB for a total cash consideration of RM3 million and RM1.9 million respectively.
