SG Dealbook: JEP Holdings to acquire JEPI; GP Industries acquires KEF, Celestion & GP brands

Jet engine in RAF Museum. Credit: Flickr/Roland Turner

This week has seen a series of acquisitions and asset transfers in Singapore. GP Industries has acquired three brands from its parent firm Gold Peak Industries, in the form of consumer electronics and battery brands. Meanwhile, JEP Holdings has acquired a supplier in a vertical, complementary acquisition that strengthens its core competencies.

JEP Holdings acquires JEP Industries from

Aerospace engineering solutions conglomerate JEP Holdings is acquiring a supplier – JEP Industrades (JEPI) – from JEPI’s two shareholders.

JEPI is a trading company which markets metal cutting tools such as indexable carbide inserts, tool holders, milling cutters, boring bars, and drill bits. In an official statement, JEP said the acquisition will enable vertical integration and is expected to diversify earnings, reduce costs, and strengthen JEP’s market position.

The JEP Group maintains a primary focus on the aerospace industry, but also caters to the oil and gas and equipment manufacturing industries. JEP currently has a market capitalisation of S$34.4 million, with 929 million shares outstanding and a negative price to earnings ratio in the aftermath of announcing its intention to acquire JEPI, according to a Bloomberg quote as of 16 July 2015.

JEP will issue 120 million shares to finance the acquisition, with the conglomerate receiving S$1 million in dividends, paid from the earnings of JEPI. Once the dividends payment is completed, JEPI’s net profit after tax will be paid back to the original shareholders up to a maximum of S$4 million, over the fiscal periods stretching form 2016 to 2018.

Based on the unaudited management accounts as at June 30 this year, JEPI recorded a net profit of about S$1.8 million, and had net tangible assets of approximately S$7.1 million. However, despite revenue rises for the past few years, sine 2011, JEP Holdings has seen their net income decline from a gain of $1.4 million in 2013 to a loss of $1.3 million in 2014, despite increasing revenues from $36.8 million to $49.8 million.

This was due to an increase in the percentage of sales dealing with cost of goods sold, which increased from 87.08 percent to 90.91 percent. This was a key factor in the decline of net income, despite rising revenues.

Commenting on the acquisition, JEP Holdings CEO and executive chairman Joe Lau said, “This vertical integration of JEPI, one of our existing suppliers, will enable a reduction of costs in their order fulfilment to us, while eliminating the leasing costs for their facilities as we will accommodate them on our own premises. Aside from the cost savings, the acquisition will diversify our revenue streams and should also strengthen our position in the competitive global market.”

Also Read: ASEAN a promising space for dealflow in aerospace & travel

GP Industries acquires KEF, Celestial and GP brands from Gold Peak Industries

Electronics and batteries manufacturer GP Industries has acquired the brands of the KEF consumer speakers, Celestion speakers drivers and GP batteries from GP Industries majority shareholder, Gold Peak Industries Limited, for S$6.32 million (US$4.62 million).

According to a filing, the acquisitions of the brands will now enable GP Industries to secure ownership of the brands and is part of a broader strategy to develop the brands and enhance their brand strength, value to customers and affiliation to GP Industries.

In an official statement, GP Industries stated the acquisitions are not expected to impact the net tangible assets per share or earnings per share (EPS) of the company for the current fiscal period of FY 2015-2016.

The acquisition of the KEF and the Celestion brands and all related intellectual property (IP) was effected by the acquisition of all issued ordinary shares in the capital of KEF Celestion Corporation from Gold Peak for a consideration of S$4.427 million. The acquisition of the GP brand and all related IP was purchase for S$1.893 million and will be managed through the GP Global Marketing Corporation (GPGM).

Currently, the market capitalisation of GP Industries, is S$354.7 million (US$259.8 million), with a price to earnings ratio of 14.17. Meanwhile, Hong Kong-listed Gold Peak Industries maintains a market capitalisation of US$95.1 million, as of July 2015.

Previously, GP Industries licensed the KEF and Celestial brands for use in the electronics and acoustics business. Meanwhile, the GP brand was licensed from Gold Peak to its subsidiary, GP Batteries International, for use in the batteries business.

Also Read: Kirigami-based stretchable batteries now possible

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.