Teco Electric and Machinery Co Ltd (東元電機) has signed an agreement to acquire Malaysia’s mechanical, electrical and plumbing (MEP) engineering company NCL Energy Sdn Bhd, as the Taiwanese industrial motor manufacturer pursues booming opportunities in the Southeast Asian country’s data center and renewable energy markets.
Teco plans to acquire an 80 percent stake in NCL, becoming its largest shareholder, the company said in a statement yesterday.
Together with a proposed investment in NCL’s renewable energy subsidiary, NCL Green Energy Sdn Bhd, the deal would total up to 70 million ringgit (US$15.8 million), Teco said.
Photo courtesy of Teco Electric & Machinery Co
The transaction is expected to be completed in the second quarter of this year, the company said.
Teco’s board of directors approved the acquisition and investment plans on Friday last week, and the company held a signing ceremony in Kuala Lumpur yesterday.
“With its low electricity costs, vast land availability and strategic location near Singapore, Malaysia has attracted significant investment in data center construction, making it the country with the highest number of new data centers in Southeast Asia,” Teco chairman Morris Li (利明献) said in the statement.
Entering Malaysia’s data center MEP engineering market is just the first step, as Teco plans to expand into solar power plant, battery energy storage system, electric vehicle charging and MEP equipment sales to seize growing market opportunities there, he said.
NCL has been engaged in MEP and solar engineering in Malaysia for nearly 20 years, Teco said.
Teco has also established a strong working relationship with NCL on two hyperscale data center projects recently, the company added.
Malaysia is gearing up to become a major player in the global semiconductor industry after signing a major deal with UK chip giant Arm Holdings PLC on March 5, aiming to move into more value-added production, such as chip fabrication and integrated circuit (IC) design, from back-end IC packaging in the next five to seven years.
In addition, Malaysia has attracted sizeable investments from global tech giants such as Google, Microsoft Corp, Amazon.com Inc’s Amazon Web Services Inc and Oracle Corp in the data center area, as the country looks to position itself as Southeast Asia’s data center hub in the next few years.
Against this backdrop, the NCL deal aligns with Teco’s strategy of increasing overseas revenue to more than 50 percent within the next two to three years by targeting Southeast Asia’s high-growth potential markets, the company said.
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