Leveraged Buyout, Privatisation, And The Subsequent Re Listing Of Amtek Engineering Limited On The Singapore Stock Exchange

1327 words - 6 pages

Introduction
This analysis of the LBO of Amtek Engineering Limited (“Amtek”) in 2007 is noteworthy, primarily because it is one of the more recent example in Singapore of a leverage buyout of a public company involving private equity players , and it showcases a example of how private equity firms typically restructure and streamline the acquired company, subsequently executing their exit strategy via an initial public offering. In this paper, I will first provide a background on the leverage buyout and privatization of Amtek in 2007. This will be followed by an elaboration on the strategic, operational and organizational restructuring measures implemented by the new owners. Lastly, we ...view middle of the document...

It was obvious that it was a well-planned buyout, as each partner, individually, did not cross the 30% shareholdings to have to make a mandatory offer, but yet over the past few months had accumulated enough shareholdings to form a collective consortium for the takeover of the remaining 51% shareholdings. The consortium offered S$1.10 per share to shareholders, a 38% premium over the past 6 months volume-weighted average price and a 10% premium to the last transacted closing price, valuing Amtek at S$552 million. The takeover was wholly financed by a bridge financing loan from Standard Chartered Bank.

As the offer was deemed to be fair, and given that Amtek had been a stock counter with persistently low trading liquidity over the years, this presented a good opportunity for shareholders to exit their investments. Without much fanfare or resistance by shareholders, the consortium acquired 97.3% of the company in two months, setting the stage for a privatisation and delisting of Amtek from the Singapore Stock Exchange on 31 July 2007.

Restructuring
Post-acquisition, the private equity firms replaced the entire management team and implemented a number of operational, strategic and organisational changes. Two seasoned precision engineering industry professionals Daniel Yeong and Sheila Ng were appointed the company’s CEO and CFO, respectively, to drive the company’s growth.

A slew of restructuring initiatives were put in place:
(i) Expanding capabilities
From offering primarily metal stamping services, Amtek expanded its capabilities into end solutions by offering industrial design services. This was an astute move to unlock the potential of each of Amtek’s existing business units and aggregating their standalone capabilities into a reference point for a diversified customer base. As can be seen in Exhibit 1, it is clear that the expansion of capabilities resulted in a diversification of revenue streams from 2008 onwards.
(ii) Streamlining activities to offer one-stop manufacturing solutions
Organisational changes were implemented and reporting structures were streamlined to integrate Amtek’s key functions and remove any informational silos within the organisation. The reorganisation of its reporting structure to a matrix organisation allowed for clearer accountabilities, communication lines and coordination between its global facilities and offices.
(iii) Enhancing operational and financial flexibility and discipline
A deliberate shift to a greater portion of contract labour allowed Amtek to improve its operational flexibility. It also moved towards a compensation structure emphasising variable compensation for executives across the organisation, bring down overall salary costs.
(iv) Increased presence in growing Asian markets
Amtek re-aligned its focus, service offerings and manufacturing footprint in Asia. Amtek’s revenues from its facilities in Asia grew from 78.6% in FY08 to 88.7% in FY10.

...

Other Papers Like Leveraged Buyout, Privatisation, And The Subsequent Re-Listing Of Amtek Engineering Limited On The Singapore Stock Exchange

Case: Re-Engineering the Payment Process System at Rfc

980 words - 4 pages online through internet banking or the web application instead of mailing it is in my opinion a good choice. Nowadays (in the Netherlands) everybody is using the internet and almost 80% of the internet users bought something on the internet using internet banking. Paying by card is also very popular and less time consuming for both the bank and its customers. Using information systems and company processes such as described above will provide enough balance and structure to the expansion of the company in the next five years. Question 3: Draw a new process model for a re-engineering payment processing system at RFC.

Interrelationship of Leadership Traits, Behavior, and Subsequent Performance of the Leader

1106 words - 5 pages would not bring any improvements to the organizations and loss of competitiveness. Behavior of micromanaging would result in an unpleasant and irritating atmosphere within his/her team. This would result in antagonistic attitude by followers which will result in a negative performance. Behavior of being corrupt and making decision in self-interest without considering the effect on his/her followers or ethical consequences would result in followers

ARTICLE ON MAJOR FEATURES RECENT OF PRIVATISATION

582 words - 3 pages ArticleThe privatisation of Telstra began on the 3rd of April when the government announced plans for one of the largest privatisations in the world, a proposed US26 Billion dollar sale for Telstra. Prime Minister John Howard declared that the completed Telstra sale would be a gain for "mums and dads" and "ordinary Australians" who would suppose benefit by purchasing thousands of shares. In reality, the float will produce a bonanza for big

1. Did Nestle Undergo Either First-Order And Or/ Second Order Change According To The Case? Answer, Listing Example Of Types Of Change From The Above Story?

7146 words - 29 pages The world of Nestlé Table of contents 21 22 Nutrition, health and wellness Nestlé. Good Food, Good Life Research & Development Nutrition: the core of the Nestlé business Priority on nutrition, health and wellness Nestlé Nutrition – a specialist nutrition business The Nestlé Nutrition Council and the Nestlé Nutrition Institute Looking to the future Nestlé: almost 150 years pioneering nutrition and health 26 27 28 30

The Historical Movement of the Yen and Dollar Exchange Rates

1529 words - 7 pages | 0.45 | 1.95 | -1.51 | Source: IMF e-Library The table above shows the summary statistics of the monthly data on the Japanese foreign exchange rate per US dollars, consumer price indexes (CPI) of Japan and US, Inflation rates of Japan and US and the inflation difference between Japan and US from January 1980 to August 2013. Within this period, the average exchange rate was about 136.55 Yen per US Dollars and it has the standard deviation of

Taxation of Individuals and Limited Companies in the United Kingdom

4631 words - 19 pages Companies Introduction Corporations also bound to pay tax to the government on their profit (Chittenden Foster and Sloan, 2010).. In this section how to corporation’ taxable profit and tax liability are calculated is covered. I have calculated the taxable profit and tax liability of XYZ Limited Company in this part. I have also shown when the tax liability of the company would be due. Corporation withheld employee’s income tax and then submits to the

The Effect Of Genetic Engineering On The World’S Food Problems

832 words - 4 pages The Effect of Genetic Engineering on the World’s Food Problems Genetically modified foods look to be a great discovery for the future, however, when looking at the science behind it, does it suggest the same thing? Growing genetically modified plants would supposedly increase the number and quality of crops produced. Genetic engineering can also help develop disease resistant plants and plants that grow in areas

Money the Medium of Exchange

553 words - 3 pages MONEY-MEDIUM OF EXCHANGE In past, decade’s people use to exchange goods with each other. If one need any product than he has to give or pay the thing again that product to the sailor. Many people found difficulty in that. There is unknown saying that, “Money is better than the barter.” It is very easy to buy any product on the cash. In another word it is very easy to pay money against any product if you want to buy any product just one thing

The Challenges of Engineering

1591 words - 7 pages The Challenges of an Engineer April 15, 2010 Name Department of Electrical Engineering University of South Carolina Columbia, SC 29208 Name April 14, 2010 ELCT 361 ABET Paper The Challenges of an Engineer As technology gets more advanced, there is a higher need for power. Even though we are in a recession, the demand for power has not decreased as much as most areas. Of course there are power plants present and specifically

Supply Chain Management in the Construction Industry: Gilmor Engineering Limited Case Study

1862 words - 8 pages possible solutions. A Case study is executed on Gilmor Engineering Limited which is a construction firm in Nigeria. The company started operations in Nigeria in 1999 and within a space of ten years; the company has grown in such a manner that surprise their contemporaries. To organize a Supply chain Management topic on a construction firm is a complicated one because a great numbers of activities and processes are not static. As noted by Ruben

The Exchange Rate and the Current Account

590 words - 3 pages (IMF) and *World Bank, the Bretton Woods system was history's first example of a fully negotiated monetary order intended to govern currency relations among sovereign states. In principle, the regime was designed to combine binding legal obligations with multilateral decision-making conducted through an international organization, the IMF, endowed with limited supranational authority. In practice the initial scheme, as well as its subsequent

Related Essays

Privatisation Of The Insurance Sector Essay

536 words - 3 pages Privatisation of the Insurance Sector Printer-friendly version Worker's Opposition Gaining Momentum Lakhs of insurance employees have been waging struggle over the past two months against the introduction of the Insurance privatisation bill in parliament. On December 1, a country-wide strike was observed. Earlier on November 29, massive rallies and dharnas were staged in Delhi as well as all the state capitals. On October 30th, 2 lakh

Privatisation Of The Royal Mail Essay

5195 words - 21 pages . Two years passed before any action was taken following the Postal Service Act 2011 and in May 2013 Vince Cable Secretary of State for Business, Innovation and Skills announced that Royal Mail would be sold through a flotation on the London Stock Exchange (Why is the Royal Mail being Privatized?, 2013). This would take place on the 15th October 2013. The government would sell 60% through the flotation with a further 15% available according to

Given The Limited Land Available In Singapore

516 words - 3 pages High end, high rises, high expectations. Everything soars on this low-lying island called Singapore (Garden City). Is it wise to set aside some areas as nature reserves when Singapore has limited land? I refer nature reserves to places where people are able to enjoy the nature and take photographs to remember Singapore as a Garden City.Being a Garden City, Singapore should maintain its reputation by preserving nature reserves. Nature reserves

Consolidations – Subsequent To The Date Of Acquisition

4112 words - 17 pages balance as of the beginning of the current period. 2. The allocations established by Consolidation Entry A will also change with each subsequent consolidation, and only the unamortized balances remaining as of the beginning of the current period are recognized in this entry. IV. Subsequent Consolidations — Investment Recorded on Other than the Equity Method A. For a purchase combination where the parent