CSE Global acquires US radio communication group for US$11 million

MAINBOARD-LISTED CSE Global on Tuesday (Jan 31) said it has acquired Radio One Group, a group of radio communication companies in the United States, for US$11 million.

CSE Global had on Monday completed its sale and purchase agreement to purchase the entire issued and outstanding shares of the group, which comprises Radio One and Communications Service Co of Daytona.

Radio One Group is based in Florida and provides radio communications solutions, Federal Communications Commission (FCC) licensing assistance, servicing and two-way radio rentals to enterprise and government customers. It also installs and manages wireless networks and video surveillance camera systems.

CSE Global noted that it has been engaged in radio and critical communications business in similar markets, and expects the acquisition will be earnings accretive and be a strategic fit to complement its current business.

The acquisition is also part of the company’s strategy to expand and grow its communication businesses in the infrastructure industry markets.

For the 12 months ended Dec 31, 2022, Radio One Group recorded net profit before tax of US$3.5 million and earnings before interest, taxes, depreciation, and amortisation of US$3.7 million.

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After the acquisition, the pro-forma earnings per share of the company is expected to rise to 3.38 Singapore cents from 2.93 Singapore cents for its financial year ended 2021, assuming the acquisition has been affected on Jan 1, 2021.

CSE Global intends to fund the acquisition using proceeds from its rights issue and bank borrowings.

Shares of CSE Global closed at S$0.375 on Tuesday, up 1.4 per cent or S$0.005.