Leading oil and gas services company Deleum Berhad (“Deleum” or “the Group”) strengthened its capacity to capture the rising demand in valve solutions with the acquisition of a 70% stake in Indonesia based PT OSA Industries Indonesia (“PT OSA”) for USD 7 million (equivalent to RM31.3 million).
Deleum’s wholly-owned subsidiary Deleum Services Sdn Bhd (“DSSB”) 5 December 2024 signed a Share Purchase Agreement with OSA Industries Pte Ltd (“Vendor”) to acquire the majority stake in PT OSA, with DSSB represented by Deleum’s Group Chief Executive Officer Rao Abdullah, and the Vendor represented by its Director, Ong Siow Aik. The balance 30% stake in PT OSA remains being held by the existing Indonesian shareholder.
PT OSA, founded in Indonesia in 1994 by Ong Siow Aik, is a supplier of valves and valve maintenance services in Indonesia, including for the oil and gas industry. Since 2017, it has been the sole channel partner for Baker Hughes valves, such as safety and control valves, ball valves and actuators. PT OSA serves energy majors through its team of 72-strong, supported by its well-equipped service facility in Cikarang, Indonesia.
The acquisition would complement and fortify the existing technical expertise and capabilities of Deleum’s valve management segment through DSSB’s subsidiary Penaga Dresser Sdn Bhd. It is the sole channel partner for Baker Hughes valves for the oil and gas, and energy industries in Malaysia. The strategic location of service facilities in Terengganu, Johor, Sabah and Sarawak positions Penaga Dresser favourably to provide seamless on- to-offshore services to prominent international customers and principals.
Speaking at the signing ceremony , Deleum Group CEO Rao Abdullah said that following the signing of the Heads of Agreement in March this year, Deleum’s acquisition of a majority 70% stake in PT OSA today unlocked new opportunities for the combined entity.
Rao said: “With an enlarged and comprehensive pool of strong technical expertise in total valve management solutions, I have no doubt that our collective experience will place us in good stead to enhance service quality for our customers.”
“For our employees, this acquisition would open up opportunities for talent development, paving the way for a fuller and richer scope of cross-border experience in valve solutions.”
“Our expanded team and established presence across the two countries present the invaluable opportunity not only to tap into the dynamic valves market in South East Asia, but also extend our coverage beyond existing product lines. The ongoing and planned investments in oil and gas infrastructure, coupled with increased energy demands on the back of accelerating economies, augur well for the prospects of the valve sector in the region.”
“I am certain that the coming together of two leadership teams in the respective countries is a potent combination that would be a positive catalyst for all, in the years to come.”
The purchase consideration of USD 7 million would be fulfilled via internally-generated funds and bank borrowings. As part of the exercise, PT OSA will provide profit guarantee of USD2.7 million (equivalent to RM12.1 million) cumulatively across financial years ending 31 December 2024 and 2025. Barring unforeseen circumstances and upon satisfaction of the identified conditions precedent, the acquisition is expected to be completed within the first half of 2025.
Rao added that Deleum had undertaken a balanced approach to growth via organic and inorganic means.
Organically, Deleum had enlarged its revenue base from RM587 million to RM792 million from the financial years ended 31 December 2020 to 2023. More significantly, operating profits catapulted from RM27 million to nearly RM80 million in the same timeframe.
Notably, Deleum’s stringent financial discipline in maintaining a strong balance sheet and growth allowed the Group to deliver on its dividend policy.
Rao elaborated, “Our robust financial position has enabled us to earnestly explore inorganic means of business expansion to catapult our growth, increase our presence, and enhance our suite of solutions to better serve the energy majors.”
“Being true to our ethos of expansion, supported by our strong financial standing and mindful of the tremendous opportunities in South East Asia, Deleum has sought potential targets for merger and acquisition to continue our journey of growth. We seek successful entities whose core values are aligned with ours: upholding excellence, innovation, and exemplary governance.”
“We at Deleum are steadfast in pursuing expansion, propelling growth and priming ourselves for greater accomplishments, as we continue on our growth trajectory,” concluded Rao.
