After a breathtaking deal recently by ASTI Holdings, one of its subsidiaries has proposed a "synergetic, earnings accretive acquisition" of a group of companies in the semiconductor sector.

To recap, ASTI is selling for S$90 million cash its STI Group (see: )

Advanced Systems Automation  (ASA) is another ASTI subsidiary listed on the Catalist board of the Singapore Exchange and is principally engaged in the manufacturing of automated equipment for the encapsulation of semiconductors.

Stock price 

0.1 c

52-week range

0.1 – 0.3 c

PE (ttm)

--

Market cap

S$16 m

Shares outstanding

15.8 billion

Dividend 
yield (ttm)

--

1-year return

-8%

Source: Bloomberg

ASA announced that it has entered into an agreement to purchase, from Mr. Seah Chong Hoe, the entire issued and paid-up share capital of Yumei Technologies, Yumei REIT and Pioneer Venture. The aggregate consideration is S$10 million.

♦ Yumei Tech is principally engaged in the provision of die-casting and plastic injection moulding components, and other finishing operations such as precision machining, surface finishing, leakage treatment and sub-assembly of mechanical components.

♦ Yumei REIT is the asset management company for Yumei Tech.

♦ Pioneer Venture is principally engaged in the manufacturing of fabricated metal products except machinery and equipment. It has over ten years of experience in metal moulding technologies, manufacturing processes and integrated manufacturing solutions.

The vendor undertakes that the aggregated pre-tax profits of the target companies for financial year 2018 and 20191 will be not less than S$3,000,000. As at 28 February 2018, their aggregate book value (and net tangible asset value) is approximately S$4.07 million.

Dato' Michael Loh.DATO’ Michael Loh Soon Gnee, Executive Chairman & CEO of ASA, comments, “We see value in the target companies’ strong business track record and their expertise, and we expect the proposed acquisition will make positive contribution to ASA’s financial performance and net asset value.

"The target companies would also bring in new skill sets in die-casting and plastic injection moulding for ASA, enabling us to offer a more comprehensive value proposition to a broader customer base across a wider region. In addition, ASA could tap on the strong customer base of the target companies and create synergetic value.

"Their business presence in Malacca is also complementary to our existing business locations. We hope once the acquisition materializes, it will build up the business value for all our shareholders in the long term.”


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