Mencast

Mencast: Announced a proposed acquisition of Top Great for $24.0m to diversify its range of products. Top Great is principally engaged in the business of engineering design, procurement, fabrication and installation of structural and precision engineering systems and plants…..

Acquisition will be funded by a combination of cash and allotment and issuance of new shares. (9.6m cash and 14.4m by new ordinary shares) Top Great Group serves a customers in the environmental, marine and oil & gas sectors, with key exposure in SG, M’sia, Indo and MENA. Unaudited profit before tax of Top Great was at $4.70m for FY10 and NAV at $10.64m…..

Vendors have jointly warranted to Mencast that Top Great shall achieve net profit of not less than $8m within 2-yr period. In event Top Great fails to achieve the profit warranty, Vendors shall pay Mencast shortfall in cash. CIMB note that taking into consideration of new shares dilutions, FY11-13 EPS are adjusted down, but TP however, got lifted to $0.70 vs $0.66, pegged at 9x CY12 vs 8x previously, as house deem fit to review multiple with such accretive M&A.