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H&QAP buys stake in Sumida

Private equity firm H&Q Asia Pacific (H&QAP, 漢鼎亞太) announced yesterday it had acquired an 85.1 percent interest in Taiwan Sumida Electronics Inc (Taiwan Sumida) (台灣勝美達), the second-largest manufacturer of inverters used in notebook computers.

The firm acquired the shares from Taiwan Sumida's parent company, Sumida Corp of Japan, for US$16.3 million (NT$529.5 million), H&QAP chairman and founder Hsu Ta-lin (徐大麟) said in a telephone interview yesterday.

Sumida of Japan will retain a 14.1 percent stake in Taiwan Sumida via the Hong Kong-registered holding company Sunrise Co.

Taiwan Sumida, based in Taipei with a production plant in Suzhou, China, is a leader in the manufacture of notebook computer inverters.

Hsu said that Taiwan Sumida missed the chance to produce inverters for the increasingly popular LDC TV monitors three to four years ago, a move that it was well prepared for but unfortunately was not supported by its Japanese parent company.

"Sumida Corp is No. 1 in the world in terms of transformers and magnetic coils, [but] it did not support Taiwan Sumida's switch to the LCD TV inverters market, which is a huge market and where we see great potential for Taiwan Sumida," he said.

The decision to sell off control of its Taiwanese subsidiary to H&QAP should enable Sumida Co to refocus on its core business, Shigeyuki Yawata, chief executive of Sumida Corp, said in a statement released yesterday.

The Japanese firm "aims to maintain its cooperation with Taiwan Sumida on research and development, manufacturing and sales and continue to contribute to the company's growth," he said.

Based in Hong Kong, H&QAP has interests in technology, manufacturing, branded consumer brands and financial services throughout the Asia-Pacific region, with sales of US$2.2 billion, its Web site showed.

The acquisition of Taiwan Sumida was the latest investment in the TFT-LCD industry by H&QAP in Taiwan.

It acquired Primax Electronics Ltd (致伸電子) in September for US$265 million.

Other companies in its portfolio from this sector include Wintek Corp (勝華科技), Taiwan PCB Techvest (志超科技) and AmTran Technology Co (瑞軒科技).

Despite the change in ownership, Taiwan Sumida is unlikely to see changes in management.

"Taiwan Sumida already has a good management team and it is a good company, as its success in the notebook inverters market shows," Hsu said.

"Our strategy is to help Taiwan Sumida enter the lucrative LCD TV inverter market, allow it to gain a strong foothold within three to five years, while ensuring that it maintains its competitiveness in the notebook inverter sector," he said.

The Taiwan Sumida moniker will be retained for the next four years, whereupon a decision will be made as to whether the company should change its name.

"Taiwan Sumida already has products for the smaller Sony LCD TV models," Hsu said.

"One of our advantages is that Japanese manufacturers may be more willing to source supplies from a part-Japanese owned company with a Japanese name," he said.

H&QAP is reported to have plans to list Taiwan Sumida on the stock market, but not in the short term.

"After the business has stabilized in three to five years, we will take the company public. Whether it will be listed in Japan, Hong Kong, Taiwan or China has yet to be determined," he said.
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