UNISEM (M) BHD intends to take over Britain-based chipmaker Atlantic Technology Holdings (UK) Ltd (ATH) for US$18mil in a move to gear up for the recovery in the semiconductor industry.
The proposed purchase consideration will be settled by 4.685 million new Unisem shares and US$6mil cash.
Unisem said ATH was one of the leading independent mixed-signal and RF test and assembly players in Europe.
ATH resulted from a management buyout of ASAT (UK) Ltd's European operations in July 1999. Blue-chip European venture capitalists and the management jointly own the company.
Unisem chairman John Chia told analysts in Kuala Lumpur yesterday ATH was expected to achieve sales revenue of US$25mil for the financial year 2004 and to be able to at least break even in view of the surge in demand for semiconductors.
According to Unisem, ATH recorded a turnover of £8.57mil but incurred a net loss of £4.13mil for the year ended July 31, 2002.
For the five-month period ended Dec 31, 2002, the British chipmaker's net loss was at £374,000 on a turnover of £5.34mil.
As at Dec 31 last year, ATH's borrowings totalled £8.35mil.
Chia also told analysts that Unisem would assume about US$11mil liabilities from ATH. This makes the aggregate consideration to nearly US$30mil.
In a press statement, Chia said the proposed acquisition would bring synergistic benefits as ATH would enhance Unisem's technology capabilities in test facilities and expand its packaging portfolio by the additional high-end array packaging products.
In addition, the acquisition would further diversify Unisem's revenue mix and geographical reach. Consequently, it would reduce dependency on the US, he added.
ATH's existing customer base includes European Integrated Device Manufacturers and leading European fabless design houses.
“With the industry poised for an upswing, we have put in place the necessary infrastructure, people and strategy to optimise our returns,'' said Chia.
With the technical capabilities of ATH together with the ample production capacity of Unisem, the group would be able to respond swiftly to an expected increase in demand from existing and future customers, he added.
Semiconductor Industry Asso- ciation announced that chip sales jumped 23% in October from a year ago. Sales have been on an uptrend for nine consecutive months.
Investment analysts concur that the acquisition would complement Unisem's existing semiconductor business. And this also signals the management's confidence in the prospects of the recovery.
“This will help Unisem climb the value-added chain because there will be transfer of technology from ATH,'' said TA Securities research head C.K Ngu.
However, analysts said there might not be immediate impact on Unisem's bottomline at least in the first half of its next financial year ending Dec 31, 2004, although there would be an increase in revenue.
Unisem had returned to the black in the third quarter ended Sept 30, with a net profit of RM5,000 on a turnover of RM71.9mil.
But Unisem incurred a net loss of RM12.24mil, compared with RM6.25mil a year ago, despite a higher turnover of RM186.5mil for the nine months ended Sept 30.
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