STEng – BT

ST Engineering to take Nera private in $141.1m buyout

Shareholders to get 45 cents a share; deal helps ST grow networks business

SINGAPORE Technologies Engineering (ST Engineering) has announced that it is planning to acquire Nera Telecommunications for approximately $141.1 million, in a bid to grow its electronics arm’s communications infrastructure business.

The move, if successful, will see the generally thinly-traded Nera delisted from the Singapore Exchange (SGX) mainboard, and privatised.

In a filing to the SGX late on Friday night, ST Engineering said that the acquisition will be effected by way of a scheme of arrangement under Section 210 of the Companies Act.

The takeover is subject to court and regulatory approvals. It also requires the approval of Nera shareholders holding not less than 75 per cent in value of the company’s shares.

Eltek ASA, being the 50.05 per cent controlling shareholder of Nera, has given an irrevocable undertaking to vote in favour of the scheme.

If the scheme becomes effective, shareholders will receive an aggregate cash amount of 45 cents for each share. This comprises 6 cents to be paid by Nera as a cash dividend, amounting to approximately $21.7 million; and 39 cents to be paid by ST Engineering, amounting to approximately $141.1 million.

Said Tan Pheng Hock, president and chief executive officer of ST Engineering: ‘The acquisition is consistent with our group’s strategy to expand and extend our capabilities and services in promising new segments and products, and to strengthen our global competitive edge.’

Established in 1978 and headquartered in Singapore, Nera offers a range of products and services from satellite communications and wireless infrastructure networks, to internet protocol, optical and broadcast network infrastructure. As at Feb 9, it has a market capitalisation of approximately $171.9 million.

ST Engineering also said that the acquisition will ‘complement and enhance (its) existing business in terrestrial and wireless broadband networks.’

It intends to retain Nera’s current management team and employees after the acquisition, and will conduct a ‘comprehensive review’ of Nera’s businesses over 12 to 18 months.

ST Engineering also said that a document containing the full details of the scheme and notice of the scheme meeting – required to solicit the approval of shareholders – ‘will be despatched to shareholders in due course’.

PricewaterhouseCoopers Corporate Finance Pte Ltd has been appointed the financial adviser for the acquisition.

Nera closed trading on Friday – when it requested for a trading halt in the afternoon – 2.5 cents higher, at 50 cents per share.

On the same day, Nera released its results for the fourth quarter ended Dec 31, 2011. Turnover slipped 1.2 per cent to $47.9 million, while net profit rose 42.7 per cent to $6.05 million.

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