Integrated technology solutions company Frencken Group is acquiring a 100% stake in high-precision manufacturing solutions provider Avimac Pte Ltd for $14 million.
According to a statement, the acquisition was carried out via Frencken’s wholly-owned subsidiary, ETLA Ltd.
Frencken group president Dennis Au said the acquisition will allow the company to accelerate the expansion of its capacity to support customers’ new programmes, aside from gaining access to new technologies and competencies.
“We believe the acquisition will enable Frencken to quickly ramp up capacity and strengthen competencies to meet the requirements in our pipeline of new programmes, particularly from our customers in the semiconductor industry. The group will also be better positioned to undertake more programmes and win wallet share with customers in [the] future,” he adds.
Established in 2018 by founder of JEP Precision Engineering Joe Lau, Avimac supplies high-precision machining parts to a variety of industries, with a specialisation in the aerospace and semiconductor sectors.
By acquiring Avimac, Frencken may potentially be able to build a new business pillar in the aerospace industry, said Au.
“While the group already has experience serving the aerospace industry through our cooperation with NASA Jet Propulsion Laboratory, Avimac will act as a springboard for us to penetrate the commercial aerospace engineering industry given its established customer base, certified manufacturing facilities and forthcoming programs.”
The net book value of Avimac was $4.4 million as at July 31, 2021. Frencken said the acquisition shall be financed using its internal resources and is not expected to have a material impact on its net tangible assets per share or earnings per share for the financial year ending Dec 31, 2021.
Shares in Frencken closed 0.4% lower at $2.33 on Sept 7.
