CUBE distributor in Asia gets bought...
library.northernlight.com
Parent co. Flextech Holdings (not related to the Flextech media company that's behind the Bravo channel) seems to be a big player in the distribution of electronic components in the region. Websites:
flextechholdings.com.sg
electec.com.sg
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Story Filed: Friday, October 08, 1999 3:43 AM EST
Oct 08, 1999 (Asia Pulse via COMTEX) -- (Disclosure to the Stock Exchange of Singapore on Oct 7, 1999.)
The Board of Directors of Flextech Holdings Limited ("Flextech" Or the "Company") wishes to announce that its wholly owned subsidiary Electec Pte Ltd ("Electec"), has entered into an agreement dated 5 October 1999 with Messrs. Chia Kok Hua and Yoong Sin Yen and other shareholders (collectively the "Shareholders") of Instep Microsolutions Pte Ltd ("Instep"), to purchase all of the business, assets and liabilities of Instep, for a total consideration of S$5,000,000. In addition, Electec will also enter into an investment agreement with Messrs. Chia Kok Hua and Yoong Sin Yen, to subscribe for 150,000 new shares of par value S$1 each, representing 60% of the enlarged share capital of Sooner Technologies Pte Ltd ("Sooner"), for a total consideration of S$1,545, 000. (The two transactions shall be collectively referred to as "The Transaction").
CONSIDERATION The consideration for the Transaction would be funded from internal resources.
The purchase price for the Transaction was arrived at on a willing buyer and willing seller basis after taking into consideration, a combination of the net tangible assets of both companies as at 1 July 1999 (Instep NTA of S$606,000 and Sooner NTA of S$594,000), the quality of business and the earnings potential of Instep and Sooner.
INFORMATION ON ELECTEC Electec was incorporated in Singapore in 1990 and its principal business involves the distribution of active electronic components to the Asian market. Today, Electec is also a key provider of communications solutions and provides networking ASICs design solutions for OEMs utilizing ARM and/or USB technology, secure IT Infrastructure solutions, SmartCard solutions and contract manufacturing services. Electec also offers supply chain management services such as in-house warehousing, on-line ordering and technical-failure tracking for its customers.
INFORMATION ON INSTEP Instep was established in 1994 as a manufacturer's representative and distributor for electronic components in Asia. It represents active components such as flash memories, graphic accelerators, set top boxes and networking products. It also distributes a wide range of audio and video products serving the PC and Multimedia industries in the region. Some of the more reputable principals represented by Instep include Nvidia Corp, C-Cube Microsystems, TeraLogic, QNX Software Systems and Intervideo Inc. Its customer base includes renowned Multimedia and Internet appliance product manufacturers such as Creative Technology and Aztech.
INFORMATION ON SOONER Sooner was set up as a manufacturer and distributor for PC and PC peripheral products. It is an independent distributor specializing in shortage fulfillment or short lead-time buys catering specifically to JIT contract manufacturers and PC makers. Sooner stocks a wide range of electronic products from principals such as Intel, AMD, Samsung, Hyundai and IBM.
MANAGEMENT FOR INSTEP AND SOONER Following the Transaction, the day-to-day operations of both companies will continue to operate autonomously under its present management team headed by Messrs. Chia Kok Hua and Yoong Sin Yen.
Chia Kok Hua Mr. Chia 37, is a co-founder and director of Instep and Sooner. Mr. Chia started his career as a R&D Manager with Microcomputer Systems, and since setting up both companies, has played a major part in developing both engineering management, and computer and multimedia systems design. Mr. Chia holds a Diploma in Electrical Engineering from the Singapore Polytechnic.
Yoong Sin Yen Mr. Yoong 37, is a co-founder and director of Instep and Sooner. He is responsible for the general management and operational functions of both companies. Prior to setting up Instep and Sooner, Mr. Yoong worked for Seagate Technology International, providing engineering support to the manufacturing divisions. Mr. Yoong graduated with a Bachelor of Science in Electrical Engineering from the University of Oklahoma, USA.
RATIONALE AND FINANCIAL EFFECTS OF THE TRANSACTION The Company believes that the Transaction will provide a strong synergy to the business of Flextech and significantly boost Electec's efforts to fortify its business scope and help it develop a strategic presence in the multimedia industry. It is also expected to enlarge the product offering of Electec and strengthen the distribution infrastructure and design capabilities of the Group thus enhancing its customer base and the quality of future earnings. It will also enable Electec to tap onto an extensive geographical network and significantly bolster the business structure of Electec's distribution activities.
Under the terms of the agreement, the Transaction is deemed to have taken effect from 1 July 1999. As part of the conditions set out in the Transaction, both companies will provide a guarantee of combined profit after tax of S$1,750,000 for the 12 months beginning 1 July 1999. On the basis that the profit guarantee is achieved, this is expected to translate into a positive effect on the earnings of the Flextech Group for the financial year ended 31 December 1999.
DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS None of the Directors' or substantial shareholders of the Company has any interest, direct or indirect, in the Transaction.
By Order of the Board Submitted by Kok Tat Onn, Company Secretary on 07/10/1999 to the SES
ASIA PULSE
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