SCPE to buy stake in Singapore-listed crane business

Tat Hong announced on September 21 that it had been approached by an unnamed party regarding a potential investment, which prompted the company’s stock to jump 16% the following day to S$0.47. Bloomberg reported on November 10 that SCPE was the prospective investor, a fact later confirmed by Tat Hong.

The private equity firm has offered S$0.50 per share, an 8.6% premium to the previous close and a 23% premium to the September 21 closing price. The stock is up 33% year-to-date.

Tat Hong was established in 1957 and moved into the construction equipment space in 1978. It entered the crane rental space three years later. The company is now the largest crane-owning business in Asia Pacific and ranks ninth worldwide. It also owns the second-largest tower crane fleet in China. Tat Hong has more than 1,500 crawler, mobile and tower cranes globally.

The company posted revenue of S$458.3 million for the 2017 financial year, down from S$528.2 million for the 12 months before that due to weak market conditions. Its net loss widened from S$6.6 million to S$32 million.  

SCPE recently relaunched an effort to spin-out its team and the remaining $1 billion in private equity assets on its balance sheet into an independent entity. This is consistent with the parent company’s objective to exit the principal investment business – although it indicated that new investments would be made on a selective basis.

SCPE previously moved $2.3 billion in private equity positions off its balance sheet into four new limited partnerships backed by third-party investors. The bank subsequently initiated negotiations with the SCPE team over a spin-out but there was no breakthrough and Joe Stevens, CEO of the private equity unit, was subsequently ousted.

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• Topics
• Southeast Asia
• Industrials
• PIPEs
• Support services
• Singapore
• Standard Chartered Private Equity
• manufacturing