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5 March 2009
Presented By : Tay Woon TeckOutlook on M&A Opportunities
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Where Are The Opportunities ?
OPPORTUNITIES ARE NOWHERE
OPPORTUNITIES ARE NO WHERE
OPPORTUNITIES ARE NOW HERE
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Catalist Market Capitalisation (Jan 2008 to February 2009)Market Capitalisation of SGX Main Board and Catalist
In billion
Number of companies
In millionMkt Cap Main Catalist Total Main Catalist Average
Jan‐08 $663.20 $655.57 $7.63 765 611 154 $866.93 $1,072.95 $49.53Feb‐08 $689.00 $680.86 $8.14 768 614 154 $897.14 $1,108.90 $52.85Mar‐08 $671.80 $664.58 $7.22 770 617 153 $872.47 $1,077.12 $47.16Apr‐08 $694.60 $687.24 $7.36 770 618 152 $902.08 $1,112.04 $48.43May‐08 $715.90 $707.79 $8.11 769 621 148 $930.95 $1,139.76 $54.81Jun‐08 $661.20 $653.41 $7.80 772 623 149 $856.48 $1,048.80 $52.32Jul‐08 $643.12 $635.92 $7.20 774 630 144 $830.90 $1,009.39 $50.00Aug‐08 $596.96 $590.49 $6.46 776 631 145 $769.27 $935.80 $44.57Sep‐08 $506.21 $500.81 $5.40 775 631 144 $653.18 $793.68 $37.50Oct‐08 $382.87 $378.94 $3.94 770 632 138 $497.24 $599.58 $28.54Nov‐08 $370.11 $366.57 $3.55 769 635 134 $481.29 $577.27 $26.46Dec‐08 $384.60 $381.10 $3.50 767 633 134 $501.43 $602.05 $26.12Jan‐09 $385.60 $382.19 $3.41 768 635 133 $502.08 $601.87 $25.67Feb‐09 $358.70 $355.55 $3.15 768 636 132 $467.06 $559.04 $23.88
% drop 46% 46% 59%
Market capitalisation of Catalist declined 59% compared to Main Board of 46%. Average market value of a catalist company is $23 million compared to average value of $559 million for a Main Board company. An average catalist company is only 4% of the market value of an average Main Board company.
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Revenue Size of Catalist Companies
Revenue Size of Catalist Companies % of catalist companies
Less than $30 million 46%Between $30 million and $50 million 20%Above $50 million 34%
Total 100%
About 66% of our catalist companies have revenue of less than $50 million. In today’s global economy, without the scale and size, it is hard to compete for business and
continue to attract serious blue chip investors.
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CASE STUDY
PROPOSED MERGER OF ELECTROTECH AND ETLA BY WAY OF A SCHEME OF ARRANGEMENT
UNDER SECTION 210 OF THE COMPANIES ACT.
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Proposed Merger of ElectroTech & ETLA
The combined entity has a $300 million revenue with gross profit of $42 million and potential significant cost savings
derived from operational synergies
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Proposed Merger of ElectroTech & ETLA
In $ million Electrotech ETLA Combined
Data Storage $0 $46 $46
Semiconductor $29 $9 $38
Medical $68 $10 $78
Analytical $47 $0 $47
Electronics/Automation $70 $10 $80
Others $13 $5 $18
Total Revenue $227 $80 $306
Data Storage 0% 57% 15%
Semiconductor 13% 11% 12%
Medical 30% 12% 25%
Analytical 21% 0% 15%
Electronics/Automation 31% 13% 26%
Others 6% 6% 6%
Total Revenue 100% 100% 100%
The combined entity reduced their exposure in data storage and semiconductor industries, and position them well in recession resilence medical and analytical segments.
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Proposed Merger of ElectroTech & ETLA
The combined entity has net cash of $20 million and shareholders funds in excess of $200 million
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Lessons From This Case Study
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Learning to Love Recessions – McKinsey Quarterly 2002 Special Edition Risk and Resilence. By Richard F. Dobbs. Tomas Karakolev and Francis Malige
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Creating New Market Leader During Recession