Frencken acquires Avimac for S$14M to expand in semiconductor and aerospace sectors

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Frencken Group has acquired all of Singapore-based Avimac for S$14 million in a move to expand  its offerings in the semiconductor and aerospace sectors, the Singapore-listed company said in a filing to SGX Tuesday.

The acquisition will be via Frencken’s wholly owned subsidiary ETLA, which had used Avimac as a supplier previously.

Avimac supplies high-precision machining parts to multiple industries, with specialisation in the aerospace and semiconductor sectors.

“Avimac has advanced technologies and capabilities in high precision machining, especially for stainless steel parts given its significant exposure to the aerospace industry. This is a good fit to our Mechatronics division’s integrated capabilities from design and development to manufacturing solutions,” Dennis Au, group president of Frencken, said in the statement.

“We believe the acquisition will enable Frencken to quickly ramp up capacity and strengthen competencies to meet the requirements in our pipeline of new programs, particularly from our customers in the semiconductor industry. The group will also be better positioned to undertake more programs and win wallet share with customers in future,” he added.

Au also said the deal would allow his company to potentially build new business in the aerospace industry.

“While the group already has experience serving the aerospace industry through our cooperation with NASA Jet Propulsion Laboratory, Avimac will act as a springboard for us to penetrate the commercial aerospace engineering industry given its established customer base, certified manufacturing facilities and forthcoming programs,” he said.

The deal will be financed with internal resources, and isn’t expected to have a material impact on earnings per share in the current financial year, the filing said.

Avimac’s net book value was S$4.4 million as of end-July, but no independent valuation was conducted, Frencken said.

Frencken provides original design and original equipment manufacturing services, manufactures high-precision industrial machinery and capital equipment, and provides contract design and manufacturing services. The company’s clients span the automotive, healthcare, life sciences and semiconductor industries.