Episode Micronet News (Text/Kapok) Yesterday (8) afternoon, power management IC factory Angbao held a board of directors meeting and decided to enter into an agreement with Orthosie Investment Holdings (the acquirer) and Euporie Investment Holdings, a subsidiary 100% owned by the acquirer. In reverse triangular merger, the acquirer pays cash consideration to all shareholders of Angbao to obtain 100% of Angbao's shares. In other words, Angbao is privatized.
It is understood that this case was initiated by three international private equity funds led by Magi Capital. The transaction value of this acquisition was approximately 12.88 billion yuan New Taiwan dollars , but the outside world believed that the premium was only 5%, which was a bit too low. Angbao explained that this is a reasonable consideration based on the company's average stock price over the past one to three months after the audit committee. If the average price over the past month is used, the bargaining price is 26.5%. The average price over the three months, the premium is about 19%.
As soon as this news came out, it attracted widespread attention in the industry. In this incident, Jiwei.com believes that there are three points worthy of our attention. Why did Angbao embark on the road of privatization? What are the advantages of Angbao in the industry? What are Angbao’s future trends after privatization?
The reasons why Angbao went privatized
As for why Angbao wants to privatize, according to Jiwei.com’s observation, there are roughly two reasons. First, Angbao considers the recent slowdown in revenue growth and the decline in gross profit. It is understood that Angbao's operating growth did slow down last year, with revenue in the first 11 months of NT$4.167 billion, a year-on-year decrease of 5.61%; profits also fell simultaneously, with net profit attributable to the parent company of NT$451 million in the first three quarters, a year-on-year decrease of 29.38%. Net earnings per share were 8.06 yuan.
Second, why did Angbao choose to sell to private equity funds instead of selling to its parent company Dunnan or the group’s parent company Lite-On? According to Angbao general manager Chen Zhiliang, listed companies will consider profits, but it will take several years to establish a wafer factory or packaging and testing factory before they have a chance to make a profit, and it is more convenient for private equity funds to raise funds, so they finally considered selling to Private equity funds.
In addition, industry insiders believe that the acquisition of Angbao by international private equity funds will not only expand its business areas and create a new wave of growth opportunities, but also help accelerate the merger of Dunnan and Dahl, which will kill two birds with one stone.
Angbao's advantages in power management
Angbao's ability to win the favor of foreign businessmen is inseparable from Angbao's advantages in power management.
On the one hand, Angbao has a solid market share in the power management IC market in mainland China. Some people in the industry believe that Angbao is an important gateway for foreign companies to enter the Greater China market.
On the other hand, the 5G era is coming, and the demand for power management ICs is also increasing, which also makes Angbao one of the targets of foreign mergers and acquisitions.
It is understood that Angbao’s power management ICs are divided into four major application areas: communications, consumer electronics, industrial control and computers.
According to Taiwan media analysis, in terms of individual product lines, non-fast charging products account for more than 80% of Angbao's mobile phone charging ICs, and fast charging ICs account for about 10%, most of which are used in flagship mobile phones; among them, fast charging ICs The average selling price (ASP) and gross profit margin are both high. The 5G market has taken off this year, and the market demand for fast charging has increased. It is estimated that Angbao's fast charging IC shipments have the opportunity to grow.
Overall, in the atmosphere of de-beautification of the supply chain of mainland brand factories, Angbao has the opportunity to benefit from its American competitors and accept more orders.
Angbao intends to transform into IDM factory
and move towards privatization. What is the future development direction of Angbao? In this regard, Angbao's general manager Chen Zhiliang said that in view of the fact that major international analog IC manufacturers are developing under the IDM model, Angbao's intention to transform into an IDM factory was only raised after discussions with Dongbo Capital this time. Plan to establish or jointly own a wafer fab and packaging and testing plant.
Chen Zhiliang said that he hopes to use international capital for a wider range of financing. He is currently considering mergers and acquisitions, or investment in wafer factories, etc., not necessarily manufacturers in Taiwan or mainland China. He is looking at the world and hopes to eventually Achieve vertical integration of with , which will help the company's future development.
Finally, Angbao’s benchmark date for this transaction is tentatively set as May 28. At that time, Angbao will apply to the OTC Buying Center for delisting, and will subsequently apply to the Financial Supervisory Commission to stop the public issuance.According to Chen Zhiliang, after Angbao was delisted, it has not yet considered any listing in other countries. (Proofreading/Aki)
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