Dymon backs take-private of Singapore’s Challenger Technologies

The acquisition vehicle, owned 35% by Dymon and 65% by the CEO, Leong Thye Loo, is offering SGD 0.65 per share in cash, according to a filing dated May 30. The stock climbed 5% following the announcement and was trading at SGD 0.58, a 12-month high, as of midday on May 31, giving the company a market capitalisation of about SGD 233m.

Dymon currently has a 17.4% stake in the company, while Loo and his family control 47.3%. Their offer will not be conditional upon a minimum number of acceptances being received.

Challenger was established in 1982 and initially listed in 2004, moving to Singapore’s mainboard in 2007. The company sells office equipment such as printers and internet routers, positioning itself as an IT retailer. Otherwise, the product suite is largely comprised of home computers and consumer gadgets such as smart phones and robot vacuum cleaners.

The offering includes a free delivery option, next-day customer response, gift vouchers, and purchasing and procurement for corporate events. There are more than 40 physical sales outlets and a significant e-commerce business.

Revenue rose 1.9% year-on-year to SGD 291.4m in the 12 months ended December 2022, although this reflects an 11.6% decline compared to 2019. Net profit came to SGD 9.4m, down 47% versus 2021, with the company citing a reduction in government grants, losses on investments, and higher operating costs.

Dymon flagged declining revenue and the opportunity to implement greater management flexibility as part of its rationale for the proposed privatisation. It described Singapore’s electronics retail market as challenging and “saturated.”

The private equity firm closed its third Southeast Asia fund last October on USD 650m. It typically pursues carve-outs and management buyouts, pre-IPO growth investments, and privatisations. Singapore de-listings are a preferred move.

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• Topics
• Southeast Asia
• Consumer
• Buyouts
• Singapore
• Dymon Asia