WE Holdings executive chairman Terence Tea, 46, was appointed CEO of Jubilee Holdings on 30 June 2014.
WE HOLDINGS is restructuring to concentrate on its commodities businesses of coal, iron ore, cement and oil.
It intends to divest its electronics components business to its 25.52%-owned associate company, Jubilee Industries Holdings Ltd.
On 11 July, Jubilee Industries signed an MOU to acquire 100% in WE Holdings subsidiary, WE Components.
The MOU is conditional on a definitive sale and purchase agreement being signed by 31 August.
WE Components is a supplier and distributor of electronic components and products, services and solutions to industrial and commercial users.
It is able to generate annual revenue of S$72.0 million through its distribution channel, design services, as well as system integration facilities.
Jubilee Industries is a loss-making provider of precision plastic injection molding services as well as the design and fabrication of plastic injection molds.
It posted a net loss attributable to shareholders of S$5.3 million for FY2013.
To expand its components and manufacturing business, Jubilee Industries also entered a sale and purchase agreement on 10 July to acquire 26% in Malaysia’s largest electronic manufacturing services (EMS) player, EG Industries Bhd, for S$8.4 million.
Listed on the Bursa Malaysia in 1993, EG Industries has manufacturing facilities in Malaysia and Thailand that are profitable and cash generative, as well as a global distribution channel.
EG Industries Bhd's stock price has doubled over the past 3 months to 87 Malaysian sens.
Bursa Malaysia data
EG Industries' core business is in the provision of EMS of electronics, electrical, telecommunication products and automotive industrial products through its two wholly owned subsidiaries, SMT Technologies Sdn Bhd and SMT Industries Co. Limited.
Its also has other subsidiaries: EG Operations Sdn Bhd (in plastic injection molding business); and EG R&D Sdn Bhd (in design & development, study, experimentation, assessment in electrical, telecommunication, information engineering, technology and other electronics and electrical products).
EG Industries posted FY2014 revenue of RM 760 million (S$296 million, year-end 31 March). Net profit attributable to shareholders was RM 3.1 million (S$1.2 million).
The M&A is expected to spur Jubilee Industries’ transformation into a one-stop electronics solutions provider for customers by developing products design and the required plastic injection moulding.
As Jubilee Industries and EG Industries share a similar customer base, the two companies’ respective plastic molding and procurement segments can be combined to achieve greater cost-savings, operational efficiency and a more competitive pricing in the market.
Through this acquisition, Jubilee Industries is expected to manage and further enhance its procurement segment to obtain greater bargaining power with suppliers and generate economies of scale while offering an expanded product portfolio to its customers.
WE Holdings' stock price has fallen by more than 50% to 1.5 cents over the past year. Bloomberg data
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