WE Holdings

WE Holdings: Proposed to acquire Everbest Industrial Limited for US$7.4m, to be funded entirely via a share issue of 287.6m shares @ US$0.0257 (S$0.0318) apiece, 6.5% discount from its last closing price. The acquisition price is 4.1x net tangible assets and 5.6x expected FYMar15 earnings. The deal comes with a profit guarantee from the vendor, Lin Zhijiong, of at least US$1m for each of the next three years from FYMar15 to FYMar17. Everbest is a Hong Kong based company that is engaged in the trading of electronic components in China and distributes mainly to Kemet Corporation, a NYSE-listed entity. WE Holdings is of the view that the electronics and components industry in the PRC is growing at an increasing pace and will likely to lead to increased demand for Everbest’s products, and is in line with its intention to expand the electronic and system business of the company.