Yageo Corp’s (國巨) electrolytic capacitor manufacturing arm, Kaimei Electronic Corp (凱美電機), yesterday said it is to acquire Bothhand Enterprise Inc (帛漢) in a share-swap deal to broaden its product portfolio to 5G and the Internet of Things (IoT).
Kaimei’s acquisition of Bothhand is the latest in a slew of mergers and acquisitions launched by Yageo, which have made the company the nation’s biggest passive component maker.
Kaimei, which is 59 percent owned by Yageo, supplies electrolytic capacitors under the Jamicon brand to Japanese companies, including Sony Corp, JVC and Sharp Corp, according to the company’s annual report.
Electrolytic capacitors are one of the three most commonly used passive components in a wide range of electronic products.
Electrolytic capacitors last year made up 76 percent of Kaimei’s total revenue of NT$1.29 billion (US$42.74 million at the current exchange rate).
Kaimei has long been relying on a single product, electrolytic capacitors, to support its operation, which makes the firm vulnerable to volatility in the industry, the companies said in a joint statement.
The acquisition of Bothhand backs Kaimei’s efforts to diversify to areas beyond electrolytic capacitors as it searches for new growth drivers, the statement said.
Bothhand manufactures LAN transformers.
The acquisition would help Kaimei tap into the fast-growing IoT, automotive and 5G sectors, the statement said.
Each Bothhand share is to be swapped with 0.93 of a Kaimei share and the transaction would be completed on Dec. 11, it said.
The deal prices Bothhand shares at NT$82.305 based on Kaimei’s closing price of NT$88.5 on Friday last week.
The offer represented a premium of 14.47 percent on Bothhand’s closing price of NT$71.9 on Friday.
As Bothhand has 61.01 million outstanding shares, the acquisition amounts to about NT$5.02 billion.
Bothhand last year posted net profit of NT$319.75 million, down 0.44 percent from NT$321.15 million in 2016.
Earnings per share last year fell to NT$5.27 from NT$5.46 a year earlier, while revenue shrank 2 percent to NT$2.42 billion from NT$2.47 billion.
Kaimei posted profit of NT$300 million last year, after losses of NT$163 million in 2016.
Its earnings per share were NT$2.23 last year.
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