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19-05-2011, 08:42 AM
Business Times - 19 May 2011
Mencast to acquire Top Great for $24m
Move to diversify product and service range
By TEO SI JIA
STERNGEAR equipment manufacturer and services provider Mencast Holdings has entered into an agreement to acquire Top Great Engineering & Marine for $24 million.
Of the amount, $9.6 million will be funded by cash and the balance through the issue of new shares.
Top Great and its subsidiaries are involved in engineering design, procurement, fabrication and installation of structural and precision engineering systems and plants.
The group's client base includes customers from the environmental, marine and oil and gas sectors of various countries.
For the financial year ended Dec 31, 2010, the Top Great group had an unaudited profit before income tax of $4.7 million and a net asset value of $10.64 million.
Top Great has warranted that its group shall achieve a net profit of not less than $8 million in the period from May 1, 2011 to April 31, 2013. If it fails to do so, the vendors of Top Great will reimburse Mencast the shortfall in cash.
Catalist-listed Mencast serves customers in the offshore oil and gas as well as the marine industry in local and regional shipyards.
With Mencast's current core business dealing with the marine maintenance, repair and overhaul, the proposed acquisition is expected to diversify its range of products and services.
The company also plans to leverage on Top Great's established client base, reputation and accreditation.
Executive chairman and CEO of Mencast, Glenndle Sim, said that the acquisition will enable the company to 'create . . . economies of scale and strengthen its value proposition to attract and retain new clientele'.
Mencast shares fell one cent to close at 44 cents yesterday.
Mencast to acquire Top Great for $24m
Move to diversify product and service range
By TEO SI JIA
STERNGEAR equipment manufacturer and services provider Mencast Holdings has entered into an agreement to acquire Top Great Engineering & Marine for $24 million.
Of the amount, $9.6 million will be funded by cash and the balance through the issue of new shares.
Top Great and its subsidiaries are involved in engineering design, procurement, fabrication and installation of structural and precision engineering systems and plants.
The group's client base includes customers from the environmental, marine and oil and gas sectors of various countries.
For the financial year ended Dec 31, 2010, the Top Great group had an unaudited profit before income tax of $4.7 million and a net asset value of $10.64 million.
Top Great has warranted that its group shall achieve a net profit of not less than $8 million in the period from May 1, 2011 to April 31, 2013. If it fails to do so, the vendors of Top Great will reimburse Mencast the shortfall in cash.
Catalist-listed Mencast serves customers in the offshore oil and gas as well as the marine industry in local and regional shipyards.
With Mencast's current core business dealing with the marine maintenance, repair and overhaul, the proposed acquisition is expected to diversify its range of products and services.
The company also plans to leverage on Top Great's established client base, reputation and accreditation.
Executive chairman and CEO of Mencast, Glenndle Sim, said that the acquisition will enable the company to 'create . . . economies of scale and strengthen its value proposition to attract and retain new clientele'.
Mencast shares fell one cent to close at 44 cents yesterday.
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