Guoju Group Chairman Chen Taiming took another merger and acquisition, and will spend US$740 million in cash (about NT$22 billion) to buy all equity in Pulse Electronics, accelerating Guoju Group's layout in the fifth-generation mobile communications (5G) and automotive electronics.
This is the second merger and acquisition launched in one month after Guoju Group announced the maximum limit of 3.365 billion yuan and acquired Junyao-KY. The total investment of two mergers and acquisitions will be over 25 billion yuan. The amount of the acquisition of Pusi Electronics is the largest transaction in the 30 years since its establishment in Guoju Group, and it is also the second time that it has launched a cross-border merger and acquisition in the past 18 years.
Picture: Chen Taiming, Chairman of Guoju,
Guoju, yesterday (22nd), due to major information being announced, the stock trading was suspended. In the afternoon, spokesman Zhang Mingjing attended a press conference on the major information explanation and announced the merger case. With the release of major information, Guoju stocks will resume normal trading today.
Due to the huge amount of acquisition, the market is concerned about the source of Guoju’s funds. Zhang Mingjing said that Guoju has been in cash so far, and the acquisition will be fully acquired with its own funds.
Zhang Mingjing pointed out that Guoju took the lead in acquiring 100% stake in Pusi Electronics through its 100% stake in subsidiary Pluto Merger Corporation. The two parties signed a contract yesterday, and the transaction was completed after the approval of the competent authority.
Zhang Mingjing revealed that this merger was introduced a year ago through a relationship recommendation, and was intensively evaluated by Chen Taiming and the management team. The two parties were finalized to sign the contract yesterday. As for the acquisition price, it is based on Pusi's operations, profits and industry status. After careful evaluation by financial experts and management team, the relevant mergers and acquisitions will be approved by the relevant competent authorities in accordance with the procedures. There is currently no clear merger schedule.
Zhang Mingjing emphasized that Guoju purchases Pusi Electronics and can obtain five comprehensive effects. The first is to increase the product portfolio. In addition to providing complete passive components, it can also expand the customer's full purchase services in electronic components such as wireless components, high-end transformers, integrated connector modules, high-frequency chip inductors, power supply and cable systems.
Secondly, it is to increase Guoju's business scale and market visibility in the United States and Europe; thirdly, it is to continuously strengthen Guoju's complete layout in the automotive electronics and industrial specification niche market; fourthly, it is to further expand the scale of Pusi's electronic components operation through Guoju's global market layout and sales channels; fifthly, it is to further exert its comprehensive effect in technology, process and management.
National Giga and Pusi legal person calls for three positives
passive component group stock prices rose sharply, foreign capital believes that there are still new positives. The latest report of Morgan Stanley Securities (Mordan Morgan Stanley) pointed out that the price increase trend of passive components has officially turned to high-end products, and the market has just started; Taiwanese factories such as Guoju and Heshentang are expected to perform further.
Regarding Guoju's announcement yesterday (22nd) that it had invested about 22 billion yuan to acquire Pusi Electronics in the United States. The legal person believes that it can add three benefits to Guoju. First, Pusi's revenue last year was 12 billion yuan, and the merger and acquisition was estimated to contribute 2 yuan per share per share this year, and the long-term comprehensive efficiency will be improved.
Secondly, Pusi customers include Apple, Tesla, Intel, IBM, Samsung and other major manufacturers, which is beneficial to China's market expansion and popularity; thirdly, Pusi enters communication equipment and automotive electronics, which is catering to the expansion trend of high-end MLCC and is expected to help the operations.
Therefore, although the amount of 22 billion yuan seems to be quite huge, the entire transaction will help Guoji more positively. Although it is not worth it, it is already "value for money".
Morgan Stanley has jointly issued a 32-page cross-market report by analysts in Hong Kong, Japan, South Korea and other places. The content takes big data as the main axis, indicating that the data transmission enhancement of electronic devices is expanded to adopt high-end MLCC. At present, the MLCC growth has signaled that it will expand from medium and low-end products to high-end markets, driving market growth.
Morgan Stanley said that the data age is electronic, and terminal devices connected to the Internet of Things are wider. It is estimated that billions of devices from national defense, industry, aerospace, and automobiles will be connected to the Internet of Things in the future, which will grow ten times more than the current demand, and will greatly apply advanced MLCC.
After a new round of investigations, Morgan Stanley raised its revenue estimate for MLCC industry this year by 12%, to US$11 billion, an increase of 11% over last year; it is expected to ship 3.6 trillion components, and the average unit price (ASP) will increase by 4%.
Pus's value increased by 44 times in three years and was reborn
Time back to April 2015, Oaktree acquired Pusi Electronics for US$17 million (about NT$500 million). However, three years later, Guoju bought all the equity of Pusi Electronics from Oaktree for NT$22 billion in cash. The value of Pusi's component factory increased by 44 times in three years. Oaktree obviously made a lot of money in this investment case! However, Guoju cannot not know the cost of the seller. What is the abacus that the boss of Guoju Dong Chen Taiming is trying to do?
For the calculation of the amount of 22 billion yuan, Guoju said that since Pusi is an unlisted company, the acquisition price is based on Pusi's financial report, the value of listed counter companies and asset prices and other related materials. The commission requested independent experts to evaluate the reasonable price.
Guoju pointed out that although Oaktree bought Pusi for $17 million, it subsequently increased its capital and recruited former senior vice president of Amphenol, Mark Twaalfhoven, to lead the team, so it successfully led Pusi to turn its back. Therefore, the total investment cost is not as low as the original single $17 million.
Pus was founded in 1947. Although it is a well-known American electronic components leader supplier with a long history, and its main products include wireless components, network equipment, power supply and cable systems, industrial and automotive electronics, and high-frequency chip inductors, when Oaktree acquired Pus in 2015, Pus not only had debts and only had 900 employees, but after Oaktree's merger, delisting, and privatization operations, Pus was obviously reborn.
According to the information provided by Guoju, Pusi's revenue in 2017 was US$398 million (about NT$12 billion), operating profit was 1.3 billion yuan, and the global number of employees reached 6,000, including 270 R&D personnel and about 200 business. Not only does it have 16 R&D design centers around the world, but there are also 8 production bases located in China, the Czech Republic and India.
merger and acquisition of Austrian interbank has entered the electric vehicle manufacturer
Why did Pusi quickly expand from a sluggish operation with only 900 employees within three years to a scale of 6,000? "Digital Age" searched for Pusi's business activities in recent years and found that Pusi had just acquired the Austrian inductor components and cable system factory Egston in January this year. The parts company's main customers are electric vehicles, automotive electronics, industrial and electrical magnetic materials, and have layouts in communications, smart energy and automotive electronics.
Egston has a total of 6 factories in Australia, the Czech Republic, China and India, with revenue of US$87 million (about NT$2.566 billion) in 2017. However, the company also announced good news for its operations. In addition to obtaining several key major cases, it also won contracts for leading electric vehicles in North America, and will accelerate its growth in 2018.
, and Pusi's operations also improved significantly after privatization from 2016 to 2017. According to Pusi's financial report without the accountant's review, the annual revenue growth rate in 2017 was about 10.1%, and the net profit reached US$34.6 million. Compared with the loss of US$13.9 million in 2016, it not only officially turned into profit, but also EBITDA (Earnings Before Interest, Taxes; net profit before tax, interest, and depreciation and amortization) also reached US$45.1 million, which is a year worth of profits of NT$1.33 billion before amortization and depreciation.
However, Guoju is optimistic not only about Pusi's turnaround from loss to profit, but also about Pusi's value in wireless components business. He also hopes to accelerate the group's progress towards automotive and industrial regulations after the integration, and to increase Guoju's position in the high-end niche market.
