Trifast strengthens its global offering as it completes its £15 million Asian acquisition
Over the last three years, Trifast plc (`TR’ the `Group’ or `Company’) has successfully restructured its operations across its European, Asian and US businesses. An essential element of the TR management growth strategy is to identify and selectively acquire profitable, ‘self-managing bolt-on’ businesses that either extend its product range or offer niche opportunities as well as being earnings enhancing for the Group.
The Directors are therefore very pleased to announce the completion of Trifast’s Malaysian acquisition, Power Steel and Electro-Plating Works Sdn. Bhd. (“PSEP”), a manufacturer of higher value and technically sophisticated cold forged components used within the automotive, motorcycle and compressor industries in the Asian region.
PSEP was incorporated in 1972 by Mr Foo Poh Wah, the CEO and principal shareholder. The business started standard manufacturing in 1973 producing parts for local consumption. In 1982, it diversified into technically advanced fasteners and focusing on complex customised steel fastener production which enabled PSEP to supply the then emerging automotive industries in Malaysia which include Perodua and Proton.
Today, PSEP is considered to be one of the most advanced fastener manufacturers in the Asia region and this recognition is supported by the stability of its customer base, which is complementary to Trifast’s customer base, coupled with PSEP’s strong balance sheet and excellent track record.
Jim Barker, Trifast’s Chief Executive, commenting on the acquisition said: “PSEP’s ability to produce larger component size capacity coupled with TR Asia’s existing small diameter capabilities substantially broadens the Group’s reach whilst it enhances one of our strategic objectives of becoming a single source supplier to major user assemblers.”
“On behalf of the management, staff and our stakeholders, I welcome everyone at PSEP into the Trifast family. We all look forward to learning, collaborating and working with the people around the business. We have already been benefiting from our long established business relationship and now, together, we have strengthened our service offering and from here, we can capitalise on the opportunities for the combined business within the Asian territories as well as internationally.”
Malcolm Diamond MBE, Executive Chairman at Trifast added: “Whilst TR has seen growth within Europe, Asia we believe offers the largest growth opportunities overall. PSEP represents an excellent strategic fit for the Group and will form a key part of TR’s future expansion plans in the region. By adding TR’s Global sales & marketing resources to the excellent PSEP model we will see further utilisation of their capacity and an increase in our Asia capabilities.”
The acquisition has been funded by a mix of bank resource and an equity Placing which amounted to 21,621,622 shares placed at 37 pence per share, raising approximately £8 million, before expenses.
These shares will be admitted to the official list of the London Stock Exchange on 14 December 2011.
Advisers to the transaction included:
Financial adviser, sole broker, underwriter and sponsor – Arden Partners plc
Solicitors to the Company – Charles Russell LLP (Cheltenham)
Solicitors to Arden Partners plc - CMS Cameron McKenna LLP (London)
Auditors – KPMG
Registrar – Computershare
PR – Citigate Dewe Rogerson
Trifast announced its results for the six months to 30 September 2011 on 16 November 2011.
The Group’s first half performance saw revenue growth alongside an excellent increase in profitability over the 2010 comparable period reflecting a strong broad-based performance coming from the UK, Asia continuing to provide a solid foundation, The ‘Automotive Centre of Excellence’ in Holland assisted a strong performance in Europe and the US restructured operation returned to profitability. In addition, encouraging progress has been made within all four key areas of focus-margin via pricing and vendor development, TR Branded Products and for the UK: TR Direct.
PSEP is complementary to the Group’s business model and significantly strengthens its presence both within Asia and internationally. PSEP continues to experience satisfactory trading conditions.
Together, the management teams of Trifast and PSEP are very encouraged about the prospects for the Enlarged Group, which will have presence across the globe through, 21 operations in 16 countries and employing over 1,000 people.
For further information on Trifast plc please visit our investors website: www.trifast.com