KUALA LUMPUR: ACE Market- listed Inari Bhd is expecting the proposed purchase of a 100% stake in Amertron Inc (Global) Ltd to triple its revenue.
Inari managing director Dr Tan Seng Chuan said the proposed acquisition was part of the group’s diversification within the electronics manufacturing services (EMS) sector.
“There are good prospects for Inari after the acquisition. We expect Inari’s revenue to increase three-fold while our staff count will also increase to 5,000 from 1,350 currently,” he said at the signing of the memorandum of understanding (MoU) between Inari and Amertron yesterday.
Tan said Inari will conduct its due diligence on Amertron and hopes to complete the acquisition in the second half of 2012. The sales and purchase agreement is expected to be signed in the next 60 days.
“With the acquisition, we intend to broaden our current customer base from the radio frequency (RF) industry to optoelectronics. It will also allow us to expand our production facilities beyond Malaysia and give us access to Amertron’s customer base in Asia, the US and Europe,” he said.
Amertron has three EMS plants, two operating in the Philippines and one in China. Its president and CEO Roger Wang said Amertron had achieved US$120 million (RM379.2 million) in revenue in the last financial year.
Tan said the final purchase price for Amertron will be determined after due diligence is completed, and will be based on Amertron’s audited net tangible assets (NTA). As at June 30, 2011, Amertron’s NTA stood at US$32 million.
“There will be no premium for the acquisition for Amertron. We will purchase the stake based on Amertron’s actual NTA value once due diligence is completed,” said Tan.
He added that Inari is considering various options to fund the purchase. As at Sept 30, 2011, Inari had RM35.7 million in cash and bank balances while short-term and long-term borrowings stood at RM13.81 million.
“There is a lot of synergy between the two companies in terms of business platform, philosophy and manpower. Amertron grew organically in the past and this will be the next stage for Amertron,” said Wang.
This is the second proposed merger and acquisition by Inari after it was listed on the ACE Market in July last year. In December, Inari proposed to acquire a 51% stake in Ceedtec Sdn Bhd, which has an agreement to produce electronic test and measurement equipment for NYSE-listed Agilent Technologies Inc.
Incorporated in 2006, Inari produces end-to-end semiconductor packaging services for RF chips in the wireless and mobile technology markets. It currently has four production facilities in Penang that produce key components used in mobile phones and tablets.
Established in 1988, Amertron produces optoelectronic components such as infra-red, fibre optics, smart displays and light-emitting diode (LED) products. These products are used in the automotive, consumer electronics, industrial electronics and military sectors.
Inari rose 2.5 sen to close at 40 sen yesterday with 1.21 million shares traded.
This article appeared in The Edge Financial Daily, January 10, 2012.
Inari managing director Dr Tan Seng Chuan said the proposed acquisition was part of the group’s diversification within the electronics manufacturing services (EMS) sector.
“There are good prospects for Inari after the acquisition. We expect Inari’s revenue to increase three-fold while our staff count will also increase to 5,000 from 1,350 currently,” he said at the signing of the memorandum of understanding (MoU) between Inari and Amertron yesterday.
Tan said Inari will conduct its due diligence on Amertron and hopes to complete the acquisition in the second half of 2012. The sales and purchase agreement is expected to be signed in the next 60 days.
“With the acquisition, we intend to broaden our current customer base from the radio frequency (RF) industry to optoelectronics. It will also allow us to expand our production facilities beyond Malaysia and give us access to Amertron’s customer base in Asia, the US and Europe,” he said.
Amertron has three EMS plants, two operating in the Philippines and one in China. Its president and CEO Roger Wang said Amertron had achieved US$120 million (RM379.2 million) in revenue in the last financial year.
Tan said the final purchase price for Amertron will be determined after due diligence is completed, and will be based on Amertron’s audited net tangible assets (NTA). As at June 30, 2011, Amertron’s NTA stood at US$32 million.
(From left) Inari executive director Edward Mai Mang Lee, Tan, Amertron CEO Richard Wang Ta Chung and Emie Tugadi of corporate resource management, Amertron, at the signing ceremony of an MoU between Inari and Amertron.
“There will be no premium for the acquisition for Amertron. We will purchase the stake based on Amertron’s actual NTA value once due diligence is completed,” said Tan.
He added that Inari is considering various options to fund the purchase. As at Sept 30, 2011, Inari had RM35.7 million in cash and bank balances while short-term and long-term borrowings stood at RM13.81 million.
“There is a lot of synergy between the two companies in terms of business platform, philosophy and manpower. Amertron grew organically in the past and this will be the next stage for Amertron,” said Wang.
This is the second proposed merger and acquisition by Inari after it was listed on the ACE Market in July last year. In December, Inari proposed to acquire a 51% stake in Ceedtec Sdn Bhd, which has an agreement to produce electronic test and measurement equipment for NYSE-listed Agilent Technologies Inc.
Incorporated in 2006, Inari produces end-to-end semiconductor packaging services for RF chips in the wireless and mobile technology markets. It currently has four production facilities in Penang that produce key components used in mobile phones and tablets.
Established in 1988, Amertron produces optoelectronic components such as infra-red, fibre optics, smart displays and light-emitting diode (LED) products. These products are used in the automotive, consumer electronics, industrial electronics and military sectors.
Inari rose 2.5 sen to close at 40 sen yesterday with 1.21 million shares traded.
This article appeared in The Edge Financial Daily, January 10, 2012.
