4 Singapore Stocks That Conducted Acquisitions to Grow Their Business

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Companies employ a variety of methods to grow.

One way is to do so organically by building a new factory and/or launching a new product line.

Another effective way is to conduct acquisitions that will bolster their capabilities and help to expand their customer base.

If executed well, acquisitions can help the business to increase its revenue and profits.

When this happens, its share price should also rise in tandem, netting attractive capital gains for investors.

Here are four Singapore companies that recently announced acquisitions to grow their business.

Grand Venture Technology Ltd (SGX: JLB)

Grand Venture Technology, or GVT, manufactures complex precision machining, sheet metal components, and mechatronics modules.

It has manufacturing plants in Singapore, Penang, and Suzhou and serves customers in the semiconductor, electronics, aerospace, and life sciences sectors.

Late last month, GVT announced the acquisition of ACP Metal Finishing for S$17 million.

ACP is a surface treatment specialist involved in electrochemical processes coating a wide range of materials serving the aerospace, life sciences, optics, medical, and semiconductor industries.

This acquisition will confer surface treatment capabilities to GVT and allow the group to become an integrated solutions provider while supporting the development of in-house precision cleaning capabilities.

The purchase will be funded by a mixture of debt and internal cash.

GVT has to convene an extraordinary general meeting (EGM) in due course for shareholders to approve the acquisition of ACP.

Singapore Technologies Engineering Ltd (SGX: S63)

Singapore Technologies Engineering, or STE, is a technology, defence, and engineering group serving the aerospace, smart city, defence, and public security sectors.

Last week, STE announced the acquisition of D‘Crypt from Keele Investments Pte Ltd, an indirect subsidiary of StarHub Ltd (SGX: CC3).

The total consideration for the purchase was S$67.5 million.

D’Crypt was established in 2000 and specialises in cryptographic technology design, offering solutions in encrypted communication, single chip crypto tokens, secure computing, and high-performance computing.

STE presently has a Cyber division providing end-to-end IT and operating technology (OT) cybersecurity solutions.

This acquisition aims to augment the blue-chip engineering group’s cryptographic and quantum capabilities to expand its product offering.

It also aligns with the group’s strategy to grow its Cyber division and expand into new market segments.

The acquisition is slated to close in the first quarter of 2024.

Centurion Corporation Limited (SGX: OU8)

Centurion Corporation owns, develops and manages purpose-built accommodation assets (PBSA) in Singapore and Malaysia as well as student accommodation assets in Australia, the UK, and the US.

The group owns a portfolio of 34 accommodation assets with around 66,607 beds as of 30 September 2023.

Last week, Centurion signed a share sale agreement to acquire the remaining 51% stake in Oriental Amber Sdn Bhd for a consideration of around S$742,000.

Oriental Amber is engaged in the business of property investment and the provision of dormitory accommodation, management, and services.

Oriental Amber also owns a 7.6-acre freehold land in Johor Bahru that was converted from agricultural to industrial use.

The acquisition is in line with Centurion’s plan to develop this land into a workers’ accommodation with approximately 7,000 beds.

Completion of this acquisition will occur on 21 December 2023, after which Oriental Amber will become a wholly-owned subsidiary of Centurion.

Tiong Woon Corporation Ltd (SGX: BQM)

Tiong Woon is a one-stop integrated heavy lift specialist supporting the oil and gas, petrochemical, infrastructure, and construction sectors.

The group announced a strategic alliance last week with Mammoet Asia Holding (MAM) to expand its footprint in Thailand.

This collaboration will enable Tiong Woon to broaden its service offerings to existing and new customers and allow it to access the heavy lift and haulage market in Thailand.

In line with this partnership, the group will acquire transportation, heavy haulage, and heavy lifting equipment assets from MAM.

This equipment will enable Tiong Woon to undertake larger and more complex projects and position it as the partner of choice for heavy lift and haulage requirements in Thailand and the region.

The collaboration is beneficial for Tiong Woon in opening up a new market for it and will allow the group to bid for projects with new customers and offer a broader suite of services to existing customers.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.

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