Frencken Group completes S$50.2m takeover of Juken

Mainboard-listed high-tech service provider acquires plastics manufacturer.

In a release, Frencken Group Limited announced it has successfully completed its acquisition of Juken Technology Limited ("Juken") for S$50.2 million. The purchase consideration was satisfied using a combination of cash and issue of new Frencken shares. Following a compulsory acquisition exercise, Juken is now a wholly-owned subsidiary of Frencken. Accordingly, Juken will be de-listed from the Main Board of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) from 9.00 am on 4 December 2012.

Juken specialises in manufacturing precision moulded plastic components used in automotive, cameras, office equipment, data storage and medical equipment. It has manufacturing facilities in China, India, Thailand, Indonesia, Malaysia (Johor and Kuala Lumpur) and Singapore. The Group expects the acquisition of Juken to contribute positively to its future earnings.

The consideration of S$50.2 million for the acquisition of Juken was satisfied using a combination of cash and new Frencken shares. The cash consideration was paid on the basis of S$0.18 for each Juken share and a “see-through” pricing formula for all outstanding Juken warrants and Juken options. This amounted to S$41.2 million and was financed using the Group’s internal resources and bank borrowings.

The Group also issued 27.7 million new Frencken shares valued at S$9.0 million. Of this, 26.4 million new Frencken shares were issued to Mr David Wong Keng Yin, Mr William Wong Lai Huat and Juken Kogyo Co., Ltd, pursuant to irrevocable undertakings given by each of them in favour of Frencken, in exchange for their combined shareholdings of 47.6 million Juken shares, with other shareholders taking up the remaining 1.3 million new Frencken shares.

The share swap was conducted on the basis of one new Frencken share for every 1.8 Juken shares at an issue price of S$0.324 for each new Frencken share. Mr David Wong and Mr William Wong will retain their respective appointments as Chairman and Chief Executive Officer of Juken, while Juken Kogyo Co., Ltd will remain as a key and strategic partner in the continuous development of Juken’s micro moulding technology.

The Board of Frencken is pleased to welcome Mr David Wong, Mr William Wong and Juken Kogyo Co., Ltd. and look forward to working with them to realise the Group’s strategic growth plans.