GFM Services Potential Acquisition of Shapadu Energy
GFM Services Bhd is looking into acquiring Shapadu Energy Services Sdn Bhd, a move that could involve a combination of cash and shares, according to sources familiar with the matter. While details are still being worked out, the potential deal reflects GFM’s interest in expanding its oil and gas portfolio.
A source close to the negotiations mentioned, “GFM is really serious about this acquisition as they are keen to grow their presence in the oil and gas sector.” Another source noted that this wouldn’t be the first time GFM has acquired an oil and gas company, as mergers and acquisitions have always been part of their strategy.
GFM, known for its integrated facilities management services, made its initial foray into the oil and gas industry back in 2019 when it purchased a 49% stake in Highbase Strategic Sdn Bhd. Subsequently, in November of the following year, GFM acquired the remaining 51% stake in the company. Despite Highbase being a loss-making entity at the time of purchase, GFM managed to turn it around, with the oil and gas segment contributing significantly to the company’s recent financial success.
The O&G division of GFM accounted for 30% of its revenue during the last reporting period, while the integrated facilities management (IFM) division remained the primary revenue driver at 60%. The remaining 10% came from the concession segment of the company.
Ruslan Nordin, the managing director of GFM, has expressed interest in pursuing more mergers and acquisitions to bolster the company’s recurring income streams. This strategy aims to mitigate the impact of earnings fluctuations that come with being an IFM contractor. With plans to continue exploring M&A opportunities, GFM is focused on long-term growth and sustainability.
If the acquisition of Shapadu Energy materializes, it would further expand GFM’s footprint in the oil and gas sector. Shapadu Energy, which specializes in hook-up and commissioning services, offshore construction, and maintenance for the O&G industry, has faced challenges in recent years, including reported losses in the past financial year.
As the discussions between GFM and Shapadu Corp executives progress, the valuation and specifics of the potential acquisition are still being worked out. GFM’s move to acquire Shapadu Energy reflects a broader trend of consolidation in the oil and gas industry, with companies seeking to capitalize on increased global crude oil prices and growing opportunities in the sector.
Overall, the potential acquisition of Shapadu Energy by GFM underscores the dynamic landscape of the oil and gas industry, marked by strategic partnerships and expansion initiatives aimed at driving long-term growth and sustainability.
