Automatic detection systems supplier Utechzone Co (由田新技) on Thursday announced its plans to acquire shares in Favite Inc (晶彩科技), a leading manufacturer of precision optical inspection and measurement machines, through a public tender offer.
Utechzone chairman Joseph Tzou (鄒嘉駿) made the announcement at the Taipei Exchange, after the company’s board approved a plan to acquire Favite shares at NT$15 per common share on the open market.
The offer represents a 20 percent premium over Favite’s closing price of NT$12.5 on the Taiwan Stock Exchange on Thursday.
Shares of Favite yesterday rose by the maximum daily limit of 10 percent, closing at NT$13.75, while Utechzone shares rose 9.98 percent to close at NT$46.85.
Utechzone plans to buy up to 27.66 million Favite shares, equivalent to 35 percent of the latter’s outstanding shares, Tzou said, adding that the company would view the tender offer successful if it obtains 3.95 million, or a minimum of 5 percent, of Favite shares.
The tender offer began yesterday and is to continue through March 14, he said.
The acquisition of a minor stake in the Jhubei City, Hsinchu County-based Favite would allow cooperation with the local peer to expand their footprint in the global automatic optical inspection (AOI) system market, Tzou added.
An AOI system can replace human eyes, brains and motions to efficiently prevent subjectivity and fatigue, Utechzone said, adding that the system helps to achieve high precision and can assist in multiple fields, including quality control, national defense, medical care and environmental protection.
Based in New Taipei City’s Jhonghe District (中和), Utechzone is the largest AOI system supplier in Taiwan and China in terms of revenue. It also has clients in Japan, South Korea and Southeast Asia. The company’s products have been widely used in the printed circuit board, semiconductor, LCD and touch panel industries.
The company reported NT$2.81 billion (US$95.88 million) in sales last year, up 39.03 percent from a year earlier. It made NT$62.03 million in net profit during the first three quarters of the year, up 98 percent year-on-year, with earnings per share of NT$1.01.
Favite is known for its leading position in AOI systems used in the array phase of LCD panel production and in manufacturing organic LED panels. The company saw its revenue decrease 26.23 percent year-on-year to NT$1.04 billion last year and posted net losses of NT$131 million in the first three quarters of the year, or NT$1.66 in losses per share.
If the deal is completed, it would be the first of its kind between listed companies in Taiwan’s AOI industry, create an operational synergy between the two firms that would maintain their advantage in the LCD and OLED markets and allow them to jointly tap emerging businesses in the “semiconductor and chip packaging” as well as in the “artificial intelligence and smart manufacturing” fields, Tzou said.
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