Northstar completes Innovalues acquisition, targets bolt-ons

The private equity firm – which earlier this month was considering a move for a similar business, Spindex Industries, before the company’s chairman pushed ahead with a buyout offer – submitted its initial bid for Innovalues in September of last year as a scheme of arrangement. The company has now been delisted, according to a filing.

Northstar paid S$1.01 per share in cash or one share in the Precision Solutions Group – parent of the acquisition vehicle – plus S$0.61 per share in cash. Existing Innovalues shareholders can account for no more than 20% of Precision Solutions Group. Three directors, including the chairman, Goh Leng Tse, who between them owned 39% of the company, voted in favor of the offer.

“We look forward to working closely with Mr. Goh and the Innovalues management team to further expand the industry-leading business they have built. Precision manufacturing is a sector that we like tremendously, and we will be seeking opportunities to actively grow Innovalues’ business both organically and inorganically,” Choon Hong Tan, CEO of Northstar, said in a statement.

Innovalues produces precision machine parts and components for vehicles, printers, mechanical devices, sub-assembly products, and water treatment systems. It has manufacturing facilities in China, Thailand and Malaysia. China is the company's biggest geographical market, accounting for around 60% of revenue, ahead of the US on 18%. Four fifths of total sales are to the automotive sector.

Innovalues reported revenue of S$121.7 million in 2016, up from S$113.7 million the previous year. Net profit rose to S$23.9 million from S$23 million over the same period.

Northstar said in early March that it might submit a buyout offer for Spindex that exceeded the S$98 million bid from a consortium led by the company’s chairman. The consortium responded by switching its bid from a scheme of arrangement to a mandatory conditional cash offer and built up a majority stake in the business, prompting Northstar to withdraw its interest.

The private equity firm, which primarily focuses on Indonesia but also pursues deals in the broader Southeast Asia region, closed its fourth fund in November 2015 at $810 million.

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• Topics
• Southeast Asia
• Buyouts
• Industrials
• Singapore
• manufacturing
• Northstar Group