Interplex

Interplex: Barings Private Equity Asia (via investment vehicle Slater) has launched a pre-conditional voluntary offer for Interplex (formerly Amtek Engineering), at $0.82/share.

The deal values the precision engineering company at $450m, or 15.5% above its last traded price. The offer is conditional upon, amongst others, the approval of the holders of $200m 6.9% notes due 2019. The offer price also exceeds the highest closing price over the past four years.

Barings does not intend to change the management team nor introduce major business changes, although it retains the option to do so but will seek a delisting should it end up with more than 90% ownership.

The private equity firm was the winning bidder in a stake sale carried out by CVC Capital Partners and Standard Chartered Private Equity, which have a combined stake of 57.7%.

Amtek had bought US firm Interplex Industries in Mar last year, to expand its manufacturing scope beyond hard disk components. Interplex Industries made parts for blue chip customers like Apple, Bosch, Denso, and Continental.

For 1QFY16, its net profit grew nearly three times to US$11.6m on the back of a 4% rise In revenue to US$234.8m. The bottom line boost was from the absence of acquisition-related costs and FX gains from the stronger USD. The group's net gearing stood at 1.1x

Based on the offer price and street estimates, Interplex is valued at 7.3x/5.6x/4.7x FY15/FY16e/FY17e P/Es and 1.6x P/B.