Global PMX Co (智伸科), which makes auto parts and medical components, yesterday said it plans to acquire 100 percent of local peer Sixxon Precision Machinery Co Ltd (旭申) early next year to improve its product portfolio and avoid tariff risks.
Global PMX said its board of directors had approved a plan to issue 24 million new shares for the acquisition, in which the company will exchange one of its shares for 1.25 Sixxon Precision shares.
Sixxon Precision, which specializes in making transmission parts, such as gearboxes and torque converters, mainly supplies auto parts for Tesla Inc, Fiat Chrysler Automobiles NV, Hilite International Inc and ZF Transmissions Shanghai Co Ltd.
With Hilite International and ZF Transmissions providing auto parts for Porsche, Mercedes-Benz and BMW vehicles, Global PMX has a chance to enter those supply chains by buying Sixxon Precision.
“The acquisition will help us expand into transmission parts for hybrid and electric vehicles, as the products of the two companies are complementary,” Global PMX spokesperson Maggie Lin (林慈青) told a media gathering in Taipei.
The company also plans to integrate research resources and develop new auto parts to gain market share, Lin said.
The transaction amount is estimated to be NT$3.6 billion (US$115.97 million), based on Global PMX’s closing share price of NT$150 on Friday last week.
The company’s paid-in capital is expected to increase from NT$819 million to NT$1.06 billion after the acquisition, it said.
The share swap is scheduled for Jan. 31, Global PMX said.
With the deal, Global PMX would be able to move production back home from China if the US-China trade dispute worsens, Lin said, citing Sixxon Precision’s operations at the Youth Industrial Park Service Center (幼獅工業區) in Taoyuan.
US tariffs on Chinese goods have reduced sales this year by about 3 percent, Global PMX said.
Global PMX reported net income of NT$305.56 million in the first half of the year, while Sixxon Precision reported NT$191.34 million.
First-half revenue totaled NT$2.36 billion for Global PMX and NT$1.43 billion for Sixxon Precision.
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