Grand Venture to acquire surface treatment specialist for S$17 million

MANUFACTURING service provider Grand Venture Technology : JLB 0% is looking to acquire Singapore-based ACP Metal Finishing for an aggregate consideration of S$17 million in cash.

The company intends to fund this through a combination of internal resources and bank borrowings.

ACP Metal is a surface treatment specialist involved in various electrochemical and chemical processes to coat metals for industries including precision engineering manufacturers, life sciences, optics, medical, and semiconductor companies. It also provides customised electroplating services.

It is currently held by investment holding company Ardille, which is 37.5 per cent-owned by recently delisted property player Chip Eng Seng. The remaining majority of 62.5 per cent is held by Budleigh Engineering, who primarily invests in precision engineering companies.

On Thursday (Nov 30), Grand Venture highlighted surface treatment as a “critical process” required by many of its customers – particularly in the aerospace, semiconductor, life sciences and medical segments.

By expanding the group’s capabilities to surface treatment, Grand Venture said the deal was in line with its overall strategy to better serve its customers while reducing its external reliance for such services.

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“The proposed acquisition aligns with Grand Venture’s strategy to provide a one-stop full suite of services, alongside its current capabilities in ultra-precision machining, sheet metal fabrication, mechatronics assembly and testing.”

The deal is also seen to enhance the group’s competencies in the aerospace segment while expanding its customer touchpoints in this segment, from mainly China, to include Singapore and the region.

Grand Venture added that acquiring ACP Metal was “essential” for the group’s long-term competency build to “further penetrate the front-end semiconductor segment and equip the group with a differentiated advantage”.

Based on unaudited financial statements, ACP Metal’s net tangible asset value and book value stood at S$14.4 million as at end-June 2023.

Grand Venture estimates the acquisition would have reduced its net tangible assets per share as at Jun 30, 2023, to S$0.3079 from S$0.3165, had the deal been completed on Dec 31, 2022.

Assuming that the acquisition of ACP Metal took place on Jan 1, 2022, the group’s earnings per share as at Jun 30, 2023, would have stood at a lower S$0.007 compared to S$0.01.

An extraordinary general meeting will be convened to seek Grand Venture shareholders’ approval for the acquisition.

Grand Venture’s executive deputy chairman Lee Tiam Nam, its chief executive and executive director Julian Ng, and its controlling shareholder NT SPV 12 have irrevocably undertaken to vote in favour of the deal.

As at Nov 30, 2023, Lee holds shares representing 15.37 per cent of the company, with Ng holding 3.55 per cent. NT SPV 12 owns a 26.68 per cent stake.

Shares of Grand Venture closed unchanged at S$0.50 on Wednesday before the group requested a trading halt on Thursday morning. The counter resumes trading after Thursday’s midday break.