KUALA LUMPUR (April 20): ACE-market listed Nexgram Holdings Bhd's wholly-owned subsidiary Nexgram Land Sdn Bhd is planning to acquire 70% of construction outfit Blue Hill Development Sdn Bhd for RM 12.5 million.

In a filing to Bursa Malaysia today, it was revealed that Nexgram Land had on April 14, 2016, entered into a conditional share sale agreement with Spacious Glory Sdn Bhd to acquire 770,000 ordinary shares of Blue Hill, representing a 70% stake.

Blue Hill’s principal activities include rendering management service, housing development and building construction, as well as civil and electrical engineering works.

The remaining 30% stake in Blue Hill will be held by Spacious Glory directors and shareholders, Lau Tian Kit and Lim Kim Lee.

Blue Hill’s unaudited net profit for its financial year ended Sept 30, 2015 (FY15) was RM539,000, more than double its FY14 net profit of RM199,000; while revenue for FY15 was at RM11.33 million, 61.7% higher than FY14 revenue of RM7.01 million.

Nexgram said the acquisition will be funded via internally-generated funds.

“The acquisition is in line with the Nexgram Group’s strategic plan to diversify into construction business to enhance its profitability in the longer term horizon and to move the group forward, instead of depending solely on its existing core business in view of the increasing competition in its current business in the domestic and regional market,” read its announcement.

The company added that the acquisition is expected to contribute positively to the earnings and net assets per share of Nexgram for future financial years, and is expected to be completed in May 2016.

Nexgram shares were unchanged at 5.5 sen today, for a market capitalisation of RM103.52 million.