Shaw Kwei makes buyout offer for Singapore-listed Chosen
Shaw Kwei & Partners has submitted a buyout offer for Chosen Holdings, a manufacturer of plastic components commonly used in consumer electronics, cars and medical devices, that values the Singapore-listed company at approximately $68 million ($48 million).
The private equity firm wants to buy all 282 million outstanding shares in Chosen at S$0.24 apiece, a 21% premium to the last closing price prior to the offer being announced. Certain shareholders, including Aloysius Lim Cher Kia , Chosen's chairman and CEO, have committed to sell shares representing a 51% interest in the company, according to a regulatory filing.
Shaw Kwei said in a statement that privatizing Chosen will allow greater flexibility in the management of the business, remove compliance and listing costs, and optimize the use of resources. Chosen has not raised any capital through the public markets in the last five years and trading volume is generally low.
The company was established by Lim in 1986 and listed on the Singapore main board in 1999. It is involved in plastic injection molding and sub-assembly of plastic products, including the product design and development and mold design and fabrication. There are 10 manufacturing facilities are located in Singapore, Malaysia, Thailand and China.
Chosen reports revenue of S$117 million for the 12 months ended June 2015, down 0.5% year-on-year, while net profit rose 14.7% to S$3.9 million. Increased sales in Singapore - now the company's single largest source of demand - and Malaysia were counterbalanced by declining business in Thailand and China.
Shaw Kwei invests in middle-market companies with operations in China and other locations, typically targeting industrial and services businesses with valuations of $30-300 million. In 2012 it completed two take-privates of Singapore-listed companies: CHT and Beyonics Technology.
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