Inari Amertron buys stake in Taiwan's PCL

by **Cals** Wed 09 Mar 2016, 01:34

Inari Amertron buys stake in Taiwan's PCL

By Billy Toh / theedgemarkets.com | March 8, 2016 : 8:35 PM MYT

KUALA LUMPUR (March 8): Inari Amertron Bhd acquired a 9.7% stake in Taipei-listed PCL Technologies Inc for NT$335 million (RM44.5 million), cash, or NT$71 per PCL share.

In addition, Inari has entered into a memorandum of understanding (MoU) with PCL with the intention to set up a joint-venture entity (JVE) in China.

The acquisition price of NT$71 per PCL share represents a premium of 8.4% above the closing price of NT$65.5 as at March 7, 2016.

The JVE is for the purpose of providing outsourced semiconductor assembly and test (OSAT) services to major customers in China, with particular focus on front-end OSAT services. In a filing to Bursa, it said that both Inari and PCL have a common vision to list the JVE in China within five years.

The negotiation to set up and register the JVE in China between Inari and PCL is within 60 days from the date of the MoU. The initial capitalisation of the JVE shall be US$20 million. The completion of the JVE is subject to the approval of the board of directors of Inari and PCL as well as the investment and securities regulatory bodies and other relevant regulatory authorities in the country which Inari, PCL and the JVE reside in.

The acquisition allows Inari the opportunity to invest in a Taiwan Stock Exchange-listed semiconductor company whose core business complements Inari's and is profitable, well run and has a significant presence in China.

The MoU represents an opportunity for Inari to foster a business relationship with PCL with a view to collaborate and expand the OSAT and other semiconductor services in China. This will help Inari to diversify and increase its revenue and earnings stream.

PCL, which has a market capitalisation of NT$3.32 billion, is primarily engaged in manufacture and sale of optical transceiver modules.