Southern Capital agrees $180m Singapore engineering carve-out
Southern Capital Group has agreed to acquire a majority stake in United Engineers’ Singapore-listed engineering and construction division for S$230.2 million ($180 million) in cash.
The Southeast Asia-focused mid-market buyout firm will buy approximately 184.1 million shares in the division - known as UE E&C - from United Engineers at S$1.25 apiece, according to a regulatory filing. This represents a 68.2% stake in UE E&C.
The transaction still requires shareholder approval and a number of closing conditions must also be met. Southern Capital intends to privatize the business on the grounds that this will allow greater flexibility in managing UE E&C and its subsidiaries, as well as optimizing the use of management and capital resources.
UE E&C listed on the main board of the Singapore Exchange in 2011. It provides integrated engineering services, including high and low-voltage electrical power distribution, air-conditioning and mechanical ventilation, and fire protection, alarm and sanitary systems. On the construction side, the company is involved in residential, industrial, commercial and infrastructure projects. It also provides a number of related services.
UE E&C is headquartered in Singapore and has overseas operations in Brunei, China, Vietnam, Indonesia and Malaysia. The company announced a net profit of S$23.2 million for the first half of 2014, down 6% year-on-year. Revenue came to S$182.6 million, down 5%.
United Engineers' saw its net profit gain 1% year-on-year to reach S$32.9 million in the first six months of 2014. Revenue jumped 345% to S$1.96 billion, largely due to the acquisition of WBL Corp's automotive division.
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