Dancomech Holdings, which is Malaysia's best-performing initial public offering (IPO) in 2016, has made its maiden acquisition, five months after its listing on July 21.

The valves company is venturing into the business of pumps manufacturing. Dancomech is paying $951m ( RM4.25m) to have its own pumps business along with a factory that produces the pumps.

Dancomech’s share price has doubled to RM1.49 from its IPO price of 75 sen.

“We are very pleased with this acquisition. Firstly, this acquisition is immediately earnings accretive.

“The pumps business is largely controlled by two main players and we are now buying one of them, hence instantly making us a pump player,” Dancomech managing director Daniel Aik told StarBiz.

Last Thursday, Dancomech told Bursa Malaysia that it is paying RM4.25mil to acquire Chun Khong Engineering Works Sdn Bhd, a company which owns a 99-year leasehold industrial land with single-storey industrial buildings in Perak.

The land measures about 11,838.247 sq m. On this land, sits one block of detached office building, five blocks of detached factory buildings, one block of detached utility building and two blocks of store/storage buildings.

The valuation carried out by independent valuer Raine & Horne International Zaki + Partners Sdn Bhd gives the property a market value of RM4.5mil.

Aik explained that the pumps business in Malaysia has a size of roughly RM30mil to RM40mil per annum, and Dancomech intends to capture 20% of this market for a start. A 20% share would mean that Dancomech is eyeing some RM6mil to RM8mil of the business in 2017.

“Subsequently, we intend to capture a further 10% to 20% of the market every year,” he said.