Precision manufacturing solutions provider, Grand Venture Technology plans to acquire two other companies for $20 million: precision engineering firm J-Dragon Tech (Suzhou) and precision sheet metal manufacturer Formach Asia
“The acquisitions will add breadth and depth to our existing capabilities, and bring us a step closer to realising our vision of being a leading global player in the provision of precision manufacturing services,” says GVT chairman Ricky Lee.
GVT will acquire J-Dragon by paying $8 million in shares plus $4.2 million in cash. Following the acquisition, J-Dragon founder Lee Lee Boon Kwong and director Eng Pau Yuen will each hold 1.02% of GVT.
J-Dragon designs and make parts, modules and tooling for the aerospace, medical and semiconductor industries.
The acquisition will give GVT access to its patents, know-how, and R&D capabilities, and also broaden GVT’s moves into the aerospace and medical business segments.
“With the addition of J-Dragon's capabilities and partner network in China, GVT will be in a good position to tap the huge market potential and positive trends in the aerospace and medical industries, initially in China, and then internationally,” says GVT.
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GVT expects the acquisition to contribute to its immediate and future revenue streams, and also give it “a broader set of capabilities, partners and ingredients” necessary to build a sustainable precision engineering business over the long term.
Meanwhile, GVT is paying $7.8 million for Formach, in a mix of $6.8 million in shares and $1 million in cash. Formach’s founder Leong Yoke Choy and director Gan Lee Kim will each hold 0.13% in GVT upon completion of the transaction.
Johor-based Formach makes sheet metal, and provides welding and electro-mechanical machine assembly services.
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Its operations are expected to supplement GVT’s manufacturing nodes, capacity expansion and complementary capabilities for customers.
Julian Ng, CEO of GVT, said, “Formach’s capabilities in precision sheet metal fabrication, along with the resulting increase in production capacity post-acquisition, will enable us to accelerate our time to market, and facilitate faster onboarding of new customers.”
Ng aims to speed up GVT’s growth in its semiconductor and life sciences businesses.
GVT expects to complete these two acquisitions by the first quarter of 2022, subject to regulatory conditions.
In January, private equity firm Novo Tellus invested $29.87 million in GVT, to give the latter a bigger war chest to fund its growth.
Shares of GVT traded at $1.20 at 4.45pm on Dec 17.
