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TrickleStar prices IPO at S$0.26 a share to raise S$2.4m
TRICKLESTAR, which designs and sells energy-saving power strips in the US, has priced its initial public offering (IPO) at S$0.26 a share, ahead of a listing on the Catalist board of the Singapore Exchange.
The IPO will raise net proceeds of S$2.4 million through the placement of 15 million new shares.
There is no public tranche and the placement closes on June 14. Trading will commence on June 18.
Based on the IPO price, TrickleStar will have a market cap of S$21.3 million, close to 8 times its net profit of US$2 million in 2018.
Revenue in 2018 was US$12.8 million, up 24.4 per cent from 2017 on higher customer orders for power strips. TrickleStar made a net profit of US$646,653 in 2017.
Sales are driven by ratepayer-funded energy efficiency programmes in the US, said chief executive Bernard Emby.
He told The Business Times on Monday: "On every single power bill in the US, 1.5 to 2 per cent of the power bill will go into an energy efficiency fund that is spent to improve energy efficiency. Utilites (firms) will design programmes around how this money is spent to reach energy efficiency goals set by state bodies like the California Public Utilities Commission."
While energy efficiency efforts have historically targeted lighting, cooling and heating, more and more electronic devices are being plugged into power strips and left on when they are not in use.
Plug-loads are now one of the fastest-growing end uses of energy globally, accounting for between 30 to 50 per cent of commercial building electricity consumption in the US, Mr Emby said.
TrickleStar's smart power strips automatically cut off power supply to plugged-in electronics when these are not in use, thereby reducing energy usage. The products are distributed to implementation contractors that work for electric utility firms, and are on the approved lists for these programmes in more than 20 states in the US.
To date, TrickleStar has sold more than 3.5 million advanced power strips.
"There's a growing awareness of the need for energy efficiency so we have a lot of opportunity within the US," said Mr Emby.
Increasing pressure on utilities firms to decommission power stations for environmental reasons is also forcing them to find ways to smoothen out electricity demand by helping households and businesses shift more of their electricity use to off-peak periods, he said.
TrickleStar also makes energy load controllers, energy monitors, energy meters and surge protectors. Four new products with connectivity and tractability features are in the works. The first will be launched towards the end of this year, said Mr Emby.
Of the S$2.4 million in net proceeds from the placement, S$0.4 million will be used to scale and establish new sales channels. S$1 million has been earmarked for product development and acquisitions. Another S$1 million is for general working capital. Listing expenses is expected to cost S$1.5 million.
TrickleStar has committed to a dividend payout ratio of not less than 50 per cent of its consolidated net profit after tax, excluding non-controlling interests and non-recurring, one-off and exceptional items.
TrickleStar was founded in 2007 and is headquartered in Kuala Lumpur. Mr Emby had moved to Malaysia to work for his former employer, Clipsal. TrickleStar's single primary contract manufacturer is Taiwan-listed Powertech Industrial.
PrimePartners Corporate Finance is the sponsor, issue manager and placement agent.