This article first appeared in The Edge Financial Daily on October 31, 2018

KUALA LUMPUR: Sime Darby Bhd is buying Australia-based Heavy Maintenance Group Pty Ltd (HMG) for A$58 million (RM172.24 million) on a cash-free and debt-free basis.

HMG is a leading specialist provider in the manufacturing, refurbishment and surface finishing of equipment components to its customers in Australia and Asia-Pacific.

In a filing with Bursa Malaysia yesterday, Sime Darby said its indirect wholly-owned subsidiary Sime Darby Allied Operations Pty Ltd had entered into a conditional share purchase agreement with private equity fund Pemba Capital Partners Fund I Partnership LP and other minority interests on Oct 29 for the proposed acquisition.

Pemba owns 92.5% of HMG, while the remaining 7.5 is owned by a number of minority shareholders.

Upon completion of the proposed acquisition, HMG and its wholly-owned subsidiary, HMG Hardchrome Pty Ltd, will become indirect wholly-owned subsidiaries of Sime Darby.

Sime Darby said the consideration will be funded by external borrowings. It is expected that the transaction will be completed before the end of 2018, subject to approval from the Foreign Investment Review Board of Australia.

“Employees of HMG will remain employed by the company as it transfers to new ownership,” Sime Darby Industrial Australia director Dean Mehmet said in a separate statement.

He said HMG would complement and add capacity to Austchrome, its existing cylinder refurbishment and chroming business in Mackay.

“The acquisition of HMG builds geographic coverage by combining our Mackay capability with those of the HMG facility in Brisbane. We are very pleased to have retained HMG’s strong management team and look forward to working with HMG to continue building its leadership in the mining cylinder refurbishment market as well as drive growth in the oil and gas sector.”