Platinum agrees $398m exit from Asia precision manufacturer

Wanye, a listed real estate developer that has made an aggressive push into semiconductors, said in a filing that it would acquire a 33.3% position in Compart for RMB600 million ($91.7 million). Several domestic and foreign investors – among them Qiming Venture Partners – took stakes in the acquisition vehicle. Wanye also agreed to lend RMB850 million to the vehicle.

Compart supplies high-precision, machined metal components including valves, fittings, sensors, and related components, primarily serving customers in the semiconductor and medical devices industries. Its main bases of operations are in China and Malaysia.

Revenue came to $75.7 million in 2019, down from $82.3 million the previous year. Over the same period, EBITDA fell from $15.6 million to $13.2 million while the net loss widened from $199,000 to $580,000. In the first six months of 2020, the company returned a net profit of $11.5 million, while revenue and EBITDA came to $57.9 million and $20.6 million, respectively.

Platinum acquired what ultimately became Compart through the carve-out of two China-based units from Singapore’s Broadway Industrial Group for S$150 million ($111 million) in 2016. It claims to have driven a comprehensive operational improvement and M&A program.

Acquisitions included a portfolio of intellectual property that strengthened the company’s R&D capabilities in Singapore in 2018. A year later, Compart bought Alpha Precision Turning & Engineering, which helped diversify revenue, add scale, and expanded its footprint into Malaysia.

“We transformed Compart from a traditional manufacturing business into a technology-driven solutions provider that is now much more valuable to its multi-national customers in need of high-quality manufacturing partners in Asia,” said Soo Jin Goh, a managing director at Platinum and head of the firm’s Singapore investment team, in a statement.

US-based Platinum, which closed its latest global buyout fund in January 2020 with $10 billion in commitments, has made several industrials investments in Asia. The first, precision tools and injection molding specialist Ying Shing Enterprises, came in 2015. A bolt-on acquisition of Fischer Tech came two years later. In 2019, Platinum bought printed circuit board manufacturer PCI.

"We have committed substantial financial and operational resources to our investment strategy in Asia and Compart’s success further extends our track record of creating value in the region,” added Jacob Kotzubei, a partner in the firm’s Los Angeles headquarters who oversees the Singapore team.

Platinum’s most recent Asia-related deal involved a global asset and a Chinese seller. The PE firm bought Ingram Micro, a technology services provider, from HNA Group for $7.2 billion. Ingram was one of a string of high-profile purchases by HNA in the three years to 2017, when the company was investigated by regulators. Since then, HNA has been divesting assets.

BDA Partners served as financial advisor to Platinum on the deal, while Clifford Chance provided legal counsel.

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• Topics
• Southeast Asia
• Greater China
• Industrials
• Trade sale
• Singapore
• China
• Platinum Equity
• manufacturing