AA Group is acquiring PHH in a deal worth S$25 million while Procurri Corporation is entering the US market through a JV.
AA Group to acquire Engineering Manufacturing Services
AA Group Holdings has entered into an agreement to acquire the entire issued and paid-up share capital of Engineering Manufacturing Services (S) from Poh Huat Heng Corporation (PHH), the holding company of the target firm. The aggregate purchase consideration of PHH is S$25 million.
PHH is engaged in the business of underground cable installation, road reinstatement services and other related activities. PHH and its subsidiary, Germaxco, are both private companies incorporated in Singapore with limited liability. PHH is principally engaged in the business of providing one-stop high value-added general warehousing and logistics services, industrial and office space for engineering, manufacturing and industrial training and workers’ dormitory facilities.
The aggregate consideration for the deals is S$25 million; the deal is a mix of S$7 million in cash, the issuance of $7 million in zero coupon bonds and novation to the company of an S$11 million debt owing to PHH to the target.
According to details in a filing by AA Group, the target enterprise is financially strong and profitable. The acquisition is based on the fact that the target firm will provide consistent returns to the group, diversifying its business and revenue stream.
Procurri Corporation enters US market with JV
Procurri Corporation has entered the market through a joint venture (JV) company formed between its indirect subsidiary, Procurri LLC and Congruity LLC.
According to details in a filing, this will see the incorporation of a Delaware limited liability company (LLC), Rockland Congruity LLC. This JV will provide a platform for selling refurbished technology hardware, providing third party IT maintenance and supporting services for customers. The JV will see Procurri and Congruity subscribe for a 51 per cent and 49 per cent interest in Rockland Congruity for US$51 (S$72.60) and US$49 respectively.
Congruity is a US-based IT solutions company that was formed in Mar 2016 from MSDI and Rockland IT Solutions merging. MSDI was principally engaged in developing and building out IT solutions that include cloud services while Rockland’s principal activities include IT hardware and enterprise support.
According to the terms of the JV, Procurri has the option to acquire Congruity’ interest in the JV should its net profit post-tax equal or exceed US$3 million by FY18. However, should Rockland Congruity’s net tangible assets (NTA) fall under US$9.7 million in FY18, Congruity will compensate Procurri with the NTA shortfall in cash.
In a media release, Sean Murphy, Procurri’s Global CEO, said, “We have reiterated the importance of our M&A strategy, specifically for the Lifecycle Services segment in our overseas markets. Today, I am glad to announce this synergistic alliance with Congruity shortly after our recent acquisition in the U.K., both of which fit snugly within our larger blueprint of growth for our Lifecycle Services segment.”
“Congruity brings to our joint venture a strong track record of operational expertise in the maintenance services industry, which is a perfect complement to our established hardware offerings. With a full suite of reinforced in-house offerings for enterprise hardware and support services, we are equipped to embark on the next phase of significant growth,” he adds.