Industrial automation system supplier DFI Inc (友通資訊) said that its board of directors approved a plan to acquire a local network security product maker for NT$555 million (US$18.03 million) in an effort to expand into the fast-growing, cloud-based cybersecurity business and to boost its automotive presence.
DFI, which is 45 percent owned by electronics maker Qisda Corp (佳世達), said that it plans to acquire a 51.26 percent stake in Aewin Technologies Co Ltd (其陽科技).
The company plans to subscribe 30 million Aewin shares at NT$18.5 per share via a private placement, a company filing with the Taiwan Stock Exchange showed on Wednesday.
The offering implied a discount of 27 percent compared with Aewin’s closing price of NT$25.4 on Wednesday.
“Aewin is complementary to DFI in terms of product portfolio and sales channels,” DFI chairman Peter Chen (陳其宏) said in a statement.
“The combination will fuel growth by securing more high-value-added products,” he said.
Aewin supplies network security products to first-tier clients in the US and Europe. Those products include next-generation firewalls, application delivery controllers and unified threat management solutions.
Enterprises usually deploy software-defined networking in a wide area network (SD-WAN) through next-generation firewall devices to overcome network security risks.
The SD-WAN market is expected to grow at an annual rate of 59 percent to US$1.3 billion in 2021 as more enterprises introduce the technology to boost the availability of networks and to improve network cost management, energy consumption and Internet security, Gartner Inc said.
DFI’s revenue last year surged 36.55 percent year-over-year from NT$2.9 billion to NT$3.96 billion in the first three quarters, according to company financial statements filed with the exchange.
Net profits soared 47 percent to NT$479.8 million in the first three quarters of last year, compared with NT$326.56 million in the same period of 2017, or earnings per share of NT$1.37.
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