Computer and handset peripherals maker Primax Electronics Ltd (致伸) yesterday announced plans to acquire a 30 percent stake in local precision machine maker Globaltek Co (時碩) for NT$545.49 million (US$17.93 million).
The company said in an e-mailed statement that its board approved the investment plan yesterday, which is expected to help expand Primax’s business to automotive components and instrumentation parts.
Globaltek, a New Taipei City-based company established in 2000, produces components and parts used in the automotive, industrial instrument and aviation sectors.
The company is expected to make a net profit of NT$80 million on revenue of NT$1.8 billion this year, Primax said.
Primax said in the statement that it would buy 7.23 million Globaltek bonds at NT$33 per share and subscribe for 9.3 million new shares in the latter’s upcoming recapitalization scheme.
Globaltek plans to use the proceeds to expand its production capacity in Chinese factories located in Wuxi, Jiangsu Province, and in Xian, Shaanxi Province, according to the statement.
After the share acquisition deal takes effect, Primax plans to take two out of seven seats on Globaltek’s board and to appoint a new chairman.
The company also expects the investment will optimize efficiency and it expects improvement in profitability, the statement said.
The deal came after Primax in January completed the purchase of a 70 percent stake in speaker and digital audio equipment maker Tymphany HK Ltd, as the company is transforming itself from a pure PC peripherals vendor.
Taipei-based Primax mainly manufactures camera modules for mobile devices, PC peripherals and business equipment, such as laser printers, scanners and shredders.
Analysts said the firm is well-positioned to benefit from Chinese smartphone makers acquiring a larger market share, given a likely strong 4G model ramp-up this quarter.
The company reported consolidated sales of NT$13.62 billion in the July-to-September quarter, up 31 percent year-on-year and 0.3 percent quarter-on-quarter. Cumulative sales in the first nine months rose 24 percent year-on-year to NT$38.8 billion, according to a company filing with the Taiwan Stock Exchange.
Primax shares fell 2.35 percent to NT$32.05 yesterday in Taipei trading.
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