Primax completes 70% acquisition of Tymphany HK

DIVERSIFICATION::The move will enable Primax to expand into the digital home audio market and enlarge its non-Apple clientele, an analyst said

By Kevin Chen  /  Staff reporter

Thu, Jan 16, 2014 - Page 13

Computer and handset peripheral products manufacturer Primax Electronics Ltd (致伸電子) yesterday said it had completed a 70 percent stake purchase in speaker and digital audio equipment maker Tymphany HK Ltd and expects to start booking income from the acquisition later this quarter.

Taipei-based Primax said it closed the share acquisition deal with Tymphany on Friday and the two sides are now working on resource integration to optimize performance.

“The company is glad to seal the deal on schedule” after the share purchase plan was announced in October last year, Primax chairman and chief executive officer Raymond Liang (梁立省) said in a statement, adding that he expected the combined strength of the two companies would put Primax in the leading position in the digital audio market.

On Oct. 15, Primax announced that it was spending US$84.05 million to purchase a 70 percent stake in Tymphany, whose speaker and acoustic technology can be traced back to an 80-year heritage founded in Denmark.

Primax mainly manufactures camera modules for mobile devices, PC peripherals and business equipment such as laser printers, scanners and shredders. Its clients include Apple Inc, HTC Corp (宏達電), Lenovo Group Ltd (聯想), Dell Inc, Inc, Samsung Electronics Co and Xiaomi Corp (小米).

The latest acquisition will enable Primax to expand into the digital home audio market that includes Bluetooth speakers, digital music players and wireless audio solutions, analysts said.

“We are positive on its 2014 outlook as Primax is focusing on enriching its product portfolio by adding the digital home business, which has given investors confidence in potential catalysts for growth,” Fubon Securities Co (富邦證券) analyst Ange Wu (吳淵傑) said in a recent note to clients.

Wu said the company’s efforts to add more Chinese, Japanese and South Korean clients to expand its non-Apple client base should bear fruit this year, helping it to better weather fluctuations in the industry cycle.

Primax reported on Tuesday last week that its consolidated sales last month slid 2 percent month-on-month and 6.04 percent year-on-year to NT$3.77 billion (US$124.8 million).

Full-year sales reached NT$42.32 billion, a decrease of 1.89 percent from 2012.

Net profit in the first three quarters of last year dropped 20.58 percent year-on-year to NT$687.3 million, with earnings per share of NT$1.57.

Fubon estimates that the acquisition of Tymphany would contribute between 10 and 15 percent to Primax’s sales this year, with earnings contribution of NT$0.85 per share.

Primax shares rose 1.31 percent to NT$27.05 yesterday, outperforming the broader market, which advanced 0.64 percent.