CC International to acquire tax client base for RM1.58mil

KUALA LUMPUR: CC International Bhd is set to acquire the entire tax client base of Lew Pow Onn & Co, based in Seremban, for RM1.58 million as it aims to grow its professional services division. A filing with Bursa Malaysia revealed that Cheng & Co Taxation Sdn Bhd, a wholly owned subsidiary of CC International, has entered into an agreement with Lew Pow Onn & Co for the purchase.

The deal only covers the tax clientele of Lew Pow Onn & Co and does not encompass any of the firm's other assets. Cheng & Co Taxation will assume the role of tax agent for these clients. The price of RM1.58 million is determined based on the estimated net annual tax fees Cheng & Co Taxation anticipates collecting from the clients between August 1, 2026, and July 31, 2027.

However, the final cost might be lowered if the actual fees billed during the period are less than the original estimate. The price could also be altered if clients decide to leave Cheng & Co Taxation during the review period. There won't be any increase in the price if the actual fees meet or surpass the agreed amount. CC International will finance the acquisition using the remaining funds from its RM30 million private placement, which was completed in July 2023.

About RM3.2 million of the proceeds designated for mergers and acquisitions remain unused. The acquisition is expected to be finalized by August 2027 and does not need approval from CC International's shareholders or any government authority. CC International stated that the deal is not anticipated to have a significant impact on its net assets, gearing, or share capital for the financial year ending December 31, 2026, although they expect to gain potential benefits from the acquisition.