Wed, Aug 09, 2017 - Page 12 News List

Delta tenders for IP security firm Vivotek

By Lauly Li  /  Staff reporter

Delta Electronics Inc (台達電) yesterday announced a cash tender offer to acquire approximately 35 percent to 55 percent of Internet protocol (IP) security solutions provider Vivotek Inc (晶睿科技), as part of Delta’s strategy to broaden its building automation capabilities.

The acquisition will cost between NT$2.8 billion and NT$4.4 billion (US$92.7 million and US$145.7 million), based on Delta’s proposed offer of NT$98 per outstanding common share, Delta said.

“This is a friendly takeover. Delta lacks capability in providing IP security solutions, and the purchase in Vivotek will help fill the gap,” Delta spokesman Jessie Chou (周志宏) said.

IP security solutions are expected to play an important role in providing total solutions in building automation, Chou said.

The cash offer of NT$98 per common share represents a premium of nearly 18 percent based on Vivotek’s 60-day average stock price of NT$83.47, he said.

The tender offer, which is to stretch from today until Sept. 26, will be successful when the tendered shares reach a minimum of 35 percent of the company’s stock, Delta said.

Chou said Delta hopes to have control in Vivotek’s management, but it does not plan to unlist the company from the Taiwan Stock Exchange, or lay off employees.

This is the third merger and acquisition (M&A) deal Delta has initiated in the field of building automation. The firm acquired shares in two building automation companies in Austria and Canada for US$82 million and US$175.7 million respectively last year.

Delta chairman Yancy Hai (海英俊) has said more than once that M&A is the company’s favorite approach to securing long-term growth engines for Delta.

Hai said it is more efficient to gain a larger market share, as well as more clients and technologies through M&A deals.

Hai told investors in March that the company is seeking a bigger M&A target in the field of industrial automation this year.

Delta on July 28 reported net income of NT$4.23 billion for last quarter, which dropped slightly by 1.39 percent from last year’s NT$4.29 billion, but rose 8.18 percent from the prior quarter’s NT$3.91 billion.

The company’s net profit totaled NT$8.15 billion in the first half of this year, little changed from NT$8.17 billion over the same period a year ago, Delta’s filings with the Taiwan Stock Exchange show.

Delta’s cash and cash equivalents totaled NT$60.22 billion as of the end of June, according to Delta’s financial statements.

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