Platinum sells Singapore's PCI for $306m

The private equity firm paid S$203 million ($150 million) for a 77% stake in PCI in 2019. The seller was Singaporean conglomerate Chuan Hup Holdings, which had owned the business since 2011. Platinum said at the time that it wanted to strengthen PCI’s core competencies in printed circuit board assembly (PCBA) services and build a broader platform through bolt-on acquisitions.

PCI was founded in Silicon Valley in 1971 and established an LCD division in Singapore four years later. The company moved into contract manufacturing and eventually relocated its manufacturing operations to Indonesia in 1990. A Singapore listing came in 1995, followed by an expansion of design and manufacturing capabilities into China and the Philippines.

The company now describes itself as a fully integrated design, engineering, and manufacturing solutions provider with six manufacturing and design facilities across Asia. Clients span the automotive, industrial equipment, consumer lifestyle, and healthcare segments.

"We accelerated the company's transformation into a technology-driven enterprise that is integral to its customers' product development and supply chain ecosystems," said Soo Jin Goh, a managing director at Platinum and head of the firm’s Singapore-based investment team, in a statement.

"We invested in people and systems, transformed the company's sales organization and go-to-market approach to accelerate growth, and initiated 'smart factory' automation projects to increase efficiencies and create operating leverage as the company continues to scale."

Platinum claims that revenue has increased by more than 40% over the course of its holding period, with profitability also improving. PCI doubled its pace of customer acquisition, taking advantage of rising demand for connected devices. Earlier this year, it won a Singapore government contract to produce wearable contact tracing devices that are part of efforts to curb the spread of COVID-19.

PCI is expected to generate approximately $325 million in revenue this year, with low double-digit adjusted EBITDA margins and strong cash flow, according to a Celestica filing. The transaction price represents an adjusted EBTIDA multiple of 7x.

Celestica specializes in design, manufacturing, hardware platform, and supply chain solutions. It reported $5.7 billion in revenue in 2020. PCI is expected to bolster existing coverage of telematics, human-machine interface (HMI), the internet of things (IoT), and embedded systems. It will also bring in more than 20 blue-chip customers that are relevant to Celestica’s core business.

Platinum Equity has more than $25 billion of assets under management. A global buyout fund of $10 billion and a lower middle-market vehicle of $1.5 billion are currently being deployed. The firm invests selectively in Asia, chiefly in the industrials space.

PCI represents Platinum’s second Asia trade sale within 12 months. In December 2020, it exited Singapore-based metal components manufacturer Compart Systems to Shanghai Wayne Enterprises at a valuation of approximately $398 million.

Lincoln International served as financial advisor to Platinum, with BDA Partners providing additional Asia-focused advisory services. Duane Morris was the private equity firm’s legal counsel.

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