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PR Newswire
29-11-2011, 02:09 PM
THE PROPOSED ACQUISITION OF CERTAIN ASSETS OF TEAM PRECISION ENGINEERING AND TEAM INTERNATIONAL DEVELOPMENT
http://mencast.listedcompany.com/newsroo...EC5C.1.pdf [SGX Announcement]
Mencast is proposing to acquire a metal precision components manufacturer for $4.5 million to be satisfied by $0.5 million cash and $4.0 million worth of New Shares. The Company reported PBT of $0.975 million in FY 2010. No figures were given for the revenue. Valuers have accorded a market value for the Company assets of $1.1 million approx. This figures imply an earning yield of 21.7% assuming the profits are repeated in subsequent years. The deals of the transactions are similar to the ones in the past - payment stretched over a period of 2 years, $3.0 million profit warranty over a period of 3 years and 3 years service agreement for the Company's Management.
This is the third M&A deal announced from Mencast this year with total acquisition price of $43.35 million. Together, with the development of Mencast Central in their water-front facility in Penjuru (expected completion at end 2011) and planned transfer to the Mainboard, this will mark a transformational year for Mencast if these initiatives are executed properly and integrated into the Group efficiently. The latest acquisitions is unlike the rest as it is not an expansion of its services but it seems more like a complementary aspect of its business ie manufacturing the components required in MRO. The payment terms are stretched over a period of 2 years and do involve the issue of New Shares - however, it does seem that despite the issue of new shares, the EPS will be accretive. I will continue to monitor Mencast and study their various initiatives.
(Not Vested)
http://mencast.listedcompany.com/newsroo...EC5C.1.pdf [SGX Announcement]
Mencast is proposing to acquire a metal precision components manufacturer for $4.5 million to be satisfied by $0.5 million cash and $4.0 million worth of New Shares. The Company reported PBT of $0.975 million in FY 2010. No figures were given for the revenue. Valuers have accorded a market value for the Company assets of $1.1 million approx. This figures imply an earning yield of 21.7% assuming the profits are repeated in subsequent years. The deals of the transactions are similar to the ones in the past - payment stretched over a period of 2 years, $3.0 million profit warranty over a period of 3 years and 3 years service agreement for the Company's Management.
This is the third M&A deal announced from Mencast this year with total acquisition price of $43.35 million. Together, with the development of Mencast Central in their water-front facility in Penjuru (expected completion at end 2011) and planned transfer to the Mainboard, this will mark a transformational year for Mencast if these initiatives are executed properly and integrated into the Group efficiently. The latest acquisitions is unlike the rest as it is not an expansion of its services but it seems more like a complementary aspect of its business ie manufacturing the components required in MRO. The payment terms are stretched over a period of 2 years and do involve the issue of New Shares - however, it does seem that despite the issue of new shares, the EPS will be accretive. I will continue to monitor Mencast and study their various initiatives.
(Not Vested)
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