Aug 14 2007
Taipei, Lite-On Technology Corporation announces a public cash tender offer (the “Tender Offer”) for the world’s largest handset casing company, Perlos Corporation. Perlos is headquartered in Finland with its shares listed and traded on the OMX Nordic Exchange Helsinki.
The Tender Offer in brief:
- The Tender Offer price is EUR 5.20 per Perlos share in cash
- The Tender Offer price represents a premium of 40.5% over the closing price of EUR 3.70 on 10 August 2007, the last trading day prior to the announcement of the Tender Offer, and a premium of 23.4% over the volume-weighted average trading price of Perlos’ shares (EUR 4.21) during the three month period prior to the announcement of the Tender Offer
- The total value of the Tender Offer is EUR 277 million, or NT$ 12.5 billion.
- The Tender Offer period is expected to begin on or about 3 September 2007
On 13 August 2007, Lite-On and Perlos entered into a definitive agreement in respect of the Tender Offer (the ”Combination Agreement”). The board of directors of Perlos is supportive of the Tender Offer and will issue a board recommendation pursuant to Section 6 of Chapter 6 of the Finnish Securities Market Act. Upon completion of the Tender Offer, Perlos will be de-listed and will operate as an independent business within the Lite-On group. Furthermore, it is not expected that the Tender Offer would have any immediate effects on Perlos’ employees.
Lite-On has received irrevocable commitments to tender shares held by Oy G.W. Sohlberg Ab ("GWS"), in total representing 29.14% of the votes and share capital of Perlos.
Rationale of the proposed deal
Perlos is the world's largest supplier of mobile-phone casings with a 16% market share in 2006. It specializes in plastic tooling and surface treatment, and has also been strengthening capabilities in light metal. In addition to handset casing, Perlos has successfully expanded its product portfolio and diversified into other handset components and services, such as antenna and sub-assembly services.
In addition to a solid technology and product portfolio, Perlos has established manufacturing presence in Mexico, Brazil, Hungary, China and India. Not only is Perlos capable of facilitating global logistics for its customers, its strong and growing exposure in emerging markets also provides great support for customers that are aggressively making inroads into fast-growing new markets.
“Starting from 2007, Lite-On has launched its “Customer-Centric” growth strategy where Lite-On provides “one-stop-shopping” solutions to customers via its wide range of component offerings. The acquisition of Perlos will equip Lite-On with mechanical capabilities in addition to its electronic component power”, says David Lin, CEO of Lite-On Group.
Lite-On currently provides phone camera modules, LED, LED flashlights, keypad, GPS, and various types of sensors for its handset customers. Perlos will complete the product portfolio by adding casing, antenna and sub-assembly for modules. The combination of Lite-On and Perlos will significantly strengthen the handset component cluster capabilities of the combined group to provide more products and better services to handset customers.
"This is truly an exciting opportunity. The extensive technology portfolio of Lite-On combined with Perlos' outstanding capabilities in handset mechanics would immediately bring benefits to our customers. In addition, the profound experience of Lite-On and its financial resources would enable further development of the value offering", says Matti Virtanen, CEO and President of Perlos.
In addition to synergies in product offerings, Lite-On and Perlos complement each other well in many other aspects. Perlos’ comprehensive global manufacturing platform, including the Americas, Europe, and Asia, coupled with Lite-On’s strong relationships in the Taiwan/China handset supply chain will benefit both companies. It will also open up new cross-selling opportunities given the limited overlap in the customer mix. The combination will see immediate synergies and is expected to achieve greater presence of the combined group in the ever-competitive handset market.