Darco Water Technologies Announces Major Acquisition of Remaining Stake in Vietnam Water Business

Singapore, 19 December 2025 – Darco Water Technologies Limited (“Darco” or the “Company”) has announced a significant strategic transaction which could have a material impact on its business and share price. The Company has entered into a sale and purchase agreement (“SPA”) to acquire the remaining 49% stake in Darco InfraCo Vietnam Water Pte. Ltd. (“DIVW” or the “Target”), making it a wholly owned subsidiary.

Key Points of the Proposed Acquisition

• Acquisition of 49% Stake in DIVW:
  Darco will acquire 3,697,670 ordinary shares, representing approximately 49% of the issued and paid-up share capital of DIVW, from InfraCo VietAqua Pte. Ltd. (“InfraCo”) for a total consideration of US\$3,640,085 (approximately S\$4,700,442).
• Phased Payment Structure:
  The consideration will be paid in three tranches over three years:
  • Tranche A: US\$1,395,288 (~S\$1,801,735) by January 30, 2026
  • Tranche B: US\$1,103,330 (~S\$1,424,730) by January 30, 2027
  • Tranche C: US\$1,141,467 (~S\$1,473,976) by January 30, 2028

  The Company reserves the right to accelerate the purchases and payments.

• Major Transaction under SGX Listing Rules:
  This acquisition is classified as a “major transaction” as the consideration is approximately 63% of Darco’s market capitalisation (S\$7.5 million as of 18 December 2025). Shareholder approval at an extraordinary general meeting (EGM) is required.
• Financial Impact:
  The acquisition is projected to significantly strengthen Darco’s financial position:
  • Net Tangible Asset (NTA) per share increases from 15.56 to 20.58 Singapore cents.
  • Earnings Per Share (EPS) rises from 1.07 to 6.10 Singapore cents, based on pro forma calculations.
• Shareholder Loan Conversion:
  An existing interest-free shareholder loan from InfraCo (up to US\$2.7 million) will be converted into a free grant in stages, improving the balance sheet.
• End of Put and Call Options:
  Upon completion, both the Put Option (which allowed InfraCo to sell its stake to Darco) and the Call Option (which allowed Darco to buy the stake) will lapse.

Details on the Target Company and Strategic Rationale

Darco InfraCo Vietnam Water Pte. Ltd. was set up as an investment holding vehicle for water supply projects in Vietnam, holding a portfolio of project companies providing water treatment systems and consultancy services. With this acquisition, Darco will consolidate 100% ownership, potentially enhancing its control over operations, cash flows and strategic direction in Vietnam, a fast-growing market for water infrastructure.

The Target’s financials as of 30 June 2025:

• Book Value and Net Assets: S\$7.55 million and S\$6.09 million, respectively
• Net Loss: S\$0.69 million (attributable to the Target Group)

No independent valuation was undertaken; the price was set based on a previously agreed formula and commercial negotiations.

Important Considerations and Potential Price-Sensitive Information

• Shareholder Approval is Required: The transaction will only proceed if approved by shareholders at an EGM. The substantial shareholder, Wang Zhi (holding 49.16% of Darco), has undertaken to support the transaction.
• Cash Flow Management: The phased payment structure allows Darco to avoid a single large outflow, supporting its cash and reserves.
• Potential for Share Price Movement: The acquisition is transformative, doubling down on the Vietnam water market, and is expected to be earnings accretive based on pro forma figures.
• Conditions Precedent: Completion is subject to multiple conditions including regulatory, board, and shareholder approvals. There is risk the deal may not complete if conditions are not fulfilled.
• Remedies in Case of Default: The agreement includes provisions for specific performance, damages, and re-activation of the Put Option if Darco defaults.
• Change in Board Representation and Company Name: InfraCo’s directors will resign from the Target’s board as each tranche is completed, and the Target will be renamed to remove “InfraCo” after final completion.

Background on the Vendor

InfraCo VietAqua Pte. Ltd. is a subsidiary of InfraCo Asia and part of the Private Infrastructure Development Group (PIDG), an international infrastructure investor focused on sustainable and inclusive development in Asia and Africa.

Subsidiaries and Operations in Vietnam

• Darco Viet Water Company Limited: 100%-owned, design and fabrication of water treatment systems in Vietnam
• Darco Ha Tinh Company Limited: 90%-owned by DVW
• Darco Ba Lai Water Supply Limited: 95%-owned by DVW
• Darco Nghe An Company Limited: 90%-owned by DVW
• All subsidiaries focus on water treatment system design, fabrication, and related consultancy

Cautionary Statement

There is no certainty the Proposed Acquisition will be completed. The agreement is subject to various conditions, and shareholders are strongly advised to exercise caution in trading Darco shares and consult their professional advisers if in doubt.

Documents Available for Inspection

The SPA can be inspected at Darco’s registered office (1 Commonwealth Lane, #09-06, One Commonwealth, Singapore 149544) during normal business hours for three months from the announcement date.

Directors’ Statement

The Company’s directors collectively and individually accept responsibility for the accuracy of the information in this announcement.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should refer to the official announcements and consult their financial advisers before making any investment decisions related to Darco Water Technologies Limited. The completion of the transaction is subject to conditions and may not occur as described above.

View Darco Water Tech Historical chart here