The Ministry of Economic Affairs’ Investment Commission on Friday last week approved a NT$9.35 billion (US$304.40 million) buyout of medical equipment maker Microlife Corp (百略) by an affiliate of Morgan Stanley Private Equity Asia.
Microlife in March announced that it had agreed to sell all of its shares to Midas Health Co Ltd at NT$84.74 per share, a 17.85 percent premium over the stock’s 20-day average closing price of NT$71.9.
The company is to be delisted from the local bourse next month, the commission said.
Midas Health is part of a US$1.7 billion closed-end private equity plan under Morgan Stanley.
Founded in 1981 and listed on the over-the-counter Taipei Exchange in 2001, Microlife is among Taiwan’s top contract designers and manufacturers of medical equipment for home use and has never posted an operating loss, while its annual earnings per share have consistently been more than NT$5 over the past five years.
The company’s own-brand products are sold in Europe and North America, and are distributed by major retailers including Walmart Inc.
Microlife vice chairman William Hsu (許盛信) in March said that the company was seeking a buyout to secure the funds it needed to cope with rising uncertainty in global markets.
Market analysts have said that the 17.85 percent premium was lower than expected and indicative of limited growth prospects in the market for digital thermometers and blood pressure monitoring systems.
The commission also approved an application by United Microelectronics Corp (UMC, 聯電) to purchase the remaining 84.1 percent of Mie Fujitsu Semiconductor Ltd for ￥57.63 billion (US$511.55 million) and gain full ownership of the Japanese company, which operates a 12-inch fab in Japan, it said in a statement.
Catcher Technology Co (可成), the nation’s leading supplier of light-metal casings and enclosures for mobile devices, received the commission’s nod to invest US$69.9 million in the China Renewable Energy Fund, a US$300 million fund started by Apple Inc and its suppliers in Asia.
Other Taiwanese suppliers to Apple have also invested in the fund, which aims to develop 1 gigawatt of renewable energy capacity in China, with Pegatron Corp (和碩) committing US$40 million, Quanta Computer Inc (廣達) US$28.2 million and Wistron Corp (緯創) US$26.8 million.
Eastern Media International Corp (東森國際) received the commission’s green light to acquire a 30 percent stake in Hong Kong-listed Natural Beauty Biotechnology Ltd, which markets skincare and aromatherapy products, for HK$540.57 million (US$69.22 million), the commission said.
The commission at the same time approved plans by Coretronic (Suzhou) Co Ltd (揚昕科技) to invest NT$300 million to set up a subsidiary in Taiwan.
The company, established by Taiwanese projector and LCD backlight manufacturer Coretronic Corp (中強光電) in Jiangsu in China’s Jiangsu Province, is looking to mitigate the effects of the US-China trade war by establishing an industrial plastics manufacturing unit in Taiwan, the commission said.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
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