Binastra Corporation Berhad announced the acquisition of up to 51% equity interest in LF Lansen Sdn. Bhd., a company specialising in the provision of Thermal Energy Storage systems for district cooling plants and buffer tanks for data centres as well as the provision of engineering, procurement, construction and commissioning services for industrial ventilation, air-conditioning and mechanical ventilation which are primarily used for commercial and industrial buildings.
The Group has entered into conditional agreements to acquire up to 51% equity interest in LF Lansen for up to RM44.8 million in cash to be paid in 3 stages. In the 1st stage, Binastra will acquire 40.8% equity interest in LF Lansen for a total cash consideration of RM15.0 million. Out of the RM15.0 million, RM12.8 million will be used to subscribe for new LF Lansen shares (for 34.8% in the enlarged share capital) and the balance RM2.2 million will be via the acquisition of shares from the vendor (for 6% equity interest in the enlarged share capital).
In the 2nd stage, as part of the transaction, Binastra has been granted a call option to acquire an additional 10.2% equity interest in LF Lansen from the vendor at a valuation based on 8 times the price-to-earnings multiple of its FYE 31 March 2025 audited profit after tax, whereby the exercise price is capped at RM8.7 million. The call option is exercisable at any time from the availability of the audited accounts of LF Lansen for the FYE 31 March 2025 up to 31 December 2025. Upon exercise of the call option, Binastra would hold a 51.0% controlling interest in LF Lansen.
To align the long-term interests of the vendor with that of Binastra, the deal structure includes a performance-based earn-out mechanism to reward the vendor if LF Lansen achieves specified profit targets. In the 3rd stage should LF Lansen achieve the target PAT of RM10.0 million for each of the 3 financial years from FYE 31 March 2025 to FYE 31 March 2027 (“Earn Out Years”), the vendor will be entitled to an earn out payment of RM5.9 million per annum. The total earn out to be paid is RM17.6 million, if LF Lansen meets the target PAT of RM10.0 million for each of the Earn Out Years.
The earn out payment for each Earn Out Year shall be adjusted proportionately upwards or downwards should the PAT be over RM10.0 million or below RM10.0 million, subject to a minimum PAT of RM8.0 million and a maximum PAT of RM12.0 million. The maximum earn out to be paid over the 3 years is RM21.2 million.
As such, the total consideration to be paid for 51.0% equity interest, including the call option and performance-based earn-out will be up to a maximum of RM44.8 million.
Established two decades ago, LF Lansen is a CIDB Grade G7-certified contractor with an established track record in the provision of TES and buffer tanks for data centres in Malaysia, Singapore, Vietnam and the Philippines.
As of end March 2025, LF Lansen’s outstanding order book stood at RM43.0 million, with several construction contracts currently under negotiation. The company reported an audited PAT of RM2.1 million for FYE 31 March 2024 and unaudited profit before tax of RM7.1 million for the nine months ended 31 December 2024 (9MFYE2025), reflecting robust earnings growth.
The acquisition will be fully funded through internally generated funds. As of 25 March 2025, Binastra held cash and bank balances of approximately RM62.6 million.
The transaction is expected to be completed in the second half of 2025.
