GAGASAN Nadi Cergas Bhd has revealed plans to strengthen its student accommodation management through a RM185 million acquisition, securing full ownership of Konsortium PAE Sepakat Sdn Bhd (KPSSB).

KPSSB manages hostel facilities at seven polytechnic campuses throughout Malaysia.

The acquisition involves two conditional share sale agreements, with GNCB purchasing the entire equity interest in Serata Ehsan Sdn Bhd for RM80 million and in Seri Delima Anggun Sdn Bhd for RM105 million, it said in an exchange filing today (Nov 5).

“Our concession and facility management operations remain a key strength for Gagasan Nadi Cergas, delivering a steady, stable stream of recurring income,” said Gagasan Nadi group MD Datuk Wan Azman Wan Kamal (picture).

He said the acquisition would enhance Gagasan Nadi’s earnings base and allow the group to scale up its facility management operations, thus benefiting from economies of scale.

KPSSB has existing concession agreements with the Malaysian government to manage hostels at polytechnic campuses until 2036.

Gagasan Nadi said the concession is expected to provide it with a stable income stream, as KPSSB recorded a profit after tax of RM14.1 million for the financial year ending Dec 31, 2023, on a revenue of RM13.6 million.

The acquisition, funded through a combination of internally generated funds, sukuk, and bank borrowings, is pending approval from the Public Private Partnership Unit of the Prime Minister’s Department (UKAS) and Gagasan Nadi’s shareholders at an upcoming extraordinary general meeting.

As at market close, Gagasan Nadi share price remained unchanged at 27.5 sen, with a market capitalisation of RM207 million. – TMR