CMS Opus divests all O&G investments, to amp up diversification strategy

CMS Opus Private Equity Sdn Bhd has completely divested from its oil & gas investments and will further focus on diversifying into other industries, an executive aware of the development said.

The private equity arm of Bursa Malaysia-listed Cahya Mata Sarawak Bhd had previously focused on the oil and gas sector, but as of March this year, it has divested all its oil & gas related investments.

The executive quoted above confirmed to DEALSTREETASIA that the firm is further expanding its portfolio to cover broad-based sectors, to diversify and broaden quality asset opportunities for the portfolio.

The move to diversify began in 2013, this executive said, while adding that this would continue to underpin the firm’s strategy.The sectors could include engineering services, industrial products manufacturing, food manufacturing, healthcare and medical devices manufacturing and services, education, and general fast moving consumer goods retail businesses with high growth prospects.

It was not clear if the firm will reinvest in the oil & gas sector,  but this executive, who declined to be named, alluded that CMS Opus would not be discounting opportunities there.

According to parent company Cahya Mata Sarawak’s 2014 annual report released on April 8, CMS Opus has to date, seven investee companies in its portfolio with a current asset under management (AUM) totalling MYR291 million (US$80.2 million).

For the financial year 2014, CMS Opus returned investment capital amounting to MYR10.17 million (US$2.8 million).

In January this year, the firm exited its 2011 investment in Trisystems Engineering Sdn Bhd, with a capital return of MYR22,212,688 (US$6.2 million) representing an internal rate of return of 30.03 per cent and a money multiple return of 2.47 times.

CMS Opus acquired a 20 per cent stake in Trisystems in April 2011 for MYR9 million (US$2.5 million), through its COPE-KPF Opportunities 1 fund.

Trisystems is leading in the field of process instrumentation and control, filtration and combustion in Malaysia. It also offers automation systems, process packages solutions and provides custom engineering design, assembly, testing, installation, commissioning, support and training primarily for the oil and gas industry. CMS Opus’ investment has benefited Trisystems in securing double digit growth over the span of the investment horizon.

In March this year, CMS Opus acquired a 30 per cent stake in utility and water related player Damini Corporation Sdn Bhd through its COPE Opportunities 2 fund. The proceeds from the investment will be utilised for merger and acquisitions and as growth capital.

The principal activity of Damini is supplying chemicals, reagents, equipment for water treatment, water meters, engineering services to the water distributors, chemical solvents and marine gas oil for the oil and gas industry.

Local media had reported that Damini plans to grow through acquisitions, supported by CMS Opus’ capital injection.

Damini also intends to pursue a listing in the next two to three years.

“In terms of profit track record, we have already met the quantitative requirement,” group managing director Borhanuddin Ramli told local media earlier. “However, we would like to further strengthen the qualitative aspect of the requirement before we apply for a listing,” he had added.

The company reported a turnover of MYR130 million last year, with 70 per cent coming from its water industry operations and remaining 30 per cent being contributed by its activities in the oil and gas segment.

CMS Opus is a sharia-compliant private equity firm jointly established by Cahya Mata Sarawak and investment advisory firm Opus Capital Sdn Bhd in 2006. The firm primarily looks at opportunities in unlisted emerging growth companies in Malaysia and the Asean region.

Its related company, Opus Asset Management Sdn Bhd specialises in fixed income investment and has a current asset under management of MYR2.53 billion (US$702 million) as at December 2014.

Cahya Mata Sarawak is an extensive infrastructure facilitator in the state of Sarawak in eastern Malaysia.

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