Tue, Jul 03, 2018 - Page 12 News List

Concraft to buy majority stake in peer via share swap

SYNERGY:The acquisition of OBO Pro.2 should help the two companies expand their client base, integrate product lnes and boost competitiveness, Concraft said

By Kuo Chia-erh  /  Staff reporter

Molding components maker Concraft Holding Co (康控) yesterday said it plans to acquire a 57.76 percent stake in OBO Pro.2 Inc (啟宏) through a share-swap deal to expand its presence in the acoustic module market.

The share swap ratio is set at one Concraft share for six OBO shares, Concraft said in a filing with the Taiwan Stock Exchange.

Concraft is to issue about 1.2 million new common shares in exchange for about 7.22 million OBO shares.

The size of the share issuance would represent 1.11 percent of Concraft’s total outstanding shares after the deal is completed on Oct. 1, Concraft said, adding that the deal still needs regulatory approval.

The acquisition is expected to create synergy benefits by helping both firms to expand their customer base in the acoustic field, integrate product lines and boost competitiveness, Concraft said.

Concraft is considered an “Apple Inc concept stock,” as a supplier of waterproof acoustic components to the US firm.

The company last year saw net profit soar more than eightfold to NT$1.1 billion (US$360.38 million) from NT$121.65 million the previous year, which it mainly attributed to the acoustic sector’s strong growth.

Earnings per share were NT$10.53 last year, up from 2016’s NT$1.42, company data showed.

Revenue was NT$5.27 billion, more than doubling from NT$2.5 billion the previous year. Gross margin surged to 43.15 percent from 23.92 percent.

Concraft gave an optimistic guidance for this year, saying it expects gross margins to be sustainable at about 46 percent next quarter and in the fourth quarter, aided by a diversified product portfolio.

The company is also investing in the research and development of auto parts and optical components, local media quoted spokesman Joe Huang (黃翹生) as saying at an investors’ conference in May.

The company, headquartered in New Taipei City, also supplies precision plastic molding and metal stamping components to clients worldwide, including Samsung Electronics Co and Merry Electronics Co Ltd (美律).

Concraft shares yesterday edged down 0.17 percent to close at NT$292.5 on the main board before the announcement.

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