Hong Chuan Investment (鴻傳投資), a private equity fund, yesterday announced that it had completed the NT$8.6 billion(US$256 million) acquisition of Primax Electronics Ltd (致伸電子).
Hong Chuan, a company under FAT Capital Management Co (遠邦投資管理), said that as of Sept. 7 it had acquired approximately 70 percent of Primax's issued and outstanding shares at NT$18 per share.
The tender offer of NT$18 per share represents a 26.1 percent premium over Primax's average share price over the last year, the statement said.
Primax shares closed at NT$17 on Friday on the Taiwan Stock Exchange. The stock has risen 13.34 percent since the beginning of the year.
In April, the Taipei-based buyout company first announced its intention to acquire 45.774 million shares or 10 percent of Primax's issued and outstanding shares within a month.
It said at the time that it planned to purchase the remaining company shares in the next three months.
Since June, Hong Chuan has bought 281.8 million shares or 60.87 percent of Primax on the open market, the statement said.
The investment consortium led by Hong Chuan Investment has other partners that include US investment bank Merrill Lynch & Co, private equity firm H&Q Asia-Pacific, and Alpine Asia Investments Ltd, an investment entity managed by Primax chairman Raymond Liang (梁立省).
The buyout has been approved by Taiwanese regulatory authorities, the statement said.
Yuanta Core Pacific Securities Co (元大京華證券) oversaw the deal.
Primax was founded in 1984, supplying a wide range of consumer and business electronics, including scanners, printers, mice, shredders, bluetooth accessories and headsets.
The electronics company will be delisted from the Taiwan Stock Exchange when the acquisition of the outstanding shares is completed next month.
Its management is likely to remain in place, and no major staffing changes are expected.
"This buyout is a milestone for private equity in Taiwan," FAT Capital's founder and chairman Stephen Tsuei (
"This is a good bargain," he added, noting that the company is debt-free.
The deal represents the first completed private equity buyout of a Taiwan-listed firm not controlled by management shareholders.
"Primax is solid fundamentally. In addition to computer mice and keyboards, it is also very strong in making multi-function peripherals, such as all-in-one printers/scanners/copiers," Tsuei said.
Primax enjoyed an average of 25 percent growth until 2001. However, its growth has since tapered off due to stiff competition.
The company reported NT$1.65 billion (US$50 million) in sales last month, up 68.12 percent from a year earlier. For the first eight months, the company's revenues were NT$10.63 billion, an annual increase of 34.07 percent.
"Primax will now have the flexibility to pursue the merger and acquisition activity that is essential to its growth in the crowded contract electronics sector," Tsuei said.
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