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On the surface, this deal looks good but if you examine it closer, I think Buyer, Arrow, got it cheap.
FY2007 net profit after tax of the Sale Group (SG) is S$ 6.264 m
Net Gain on the Sale is S$ 23.7m (after stripping off inventory of USD20.6m + other costs)
So, the Buyer is paying P/E of (23.7/6.264) = 3.78X or potential ROI of 26.4%......cheap, cheap, cheap....
Net proceeds is S$63.3m....works out to be 12.4c per share.....all cash...which is positive.
In FY07, eps of the Company is 0.99c and the SG is 1.25c => the remainder of the Co. suffered a loss of 0.26c per share....i.e. without contribution of SG, the Company is expected to incur a loss of 0.26c for FY08...assuming proportionate reduction in overhead expenses after the sale.
Plus point is post sale NAV is expected to be 18.09 c...with the share price trading at 15.5c, it is a discount to NAV.
Also note that USD/SGD XC rate used in the announcement is 1.40.....I think a more prudent rate should be 1.38.....this will result in a FX loss of approx SGD 620K on the net proceeds....i.e S$23.08m (vs the stated 23.7m) and net cash proceeds will be 12.1c per share.
Personnal opinion....caveat emptor.
weird, how come dropped so much?? bad news cos no visible money making business left??
oops.... going south instead...
The announcement attached.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_EFC7B966C9DBAC28482574030000CBE6/$file/Bow_annc_final.pdf?openelement
Arrow values Achieva's electronic business at a premium of 81.8%. Thus NAV would be at least 26c. Expect fireworks at 0915hrs. Cheers to those vested!!!
Had read the financial statment of Achieva Ltd dated 29 Feb 08. The most profitable is the Achieva Component divsions. It is surprise to hear that Achieva is selling the most profitable divisions ie Achieva Component and keep the loss making division like Achieva Technolnogy and the lifestyle divsions. Normally a company will sell the loss making division and keep the profitable division. Am I correct? Please advsie.
so when will we know the news ah?
hehe
Yep, TH
haha. TH. i certainly hope so. :P
Strange, despite the Buyer, Arrow, making the announcement of purchasing Achieva's compoent Distribution business more than 24 hrs ago, Ach has not made their announcement.
Perhaps there may be a TH on Mon.....which will be good....cos it will insulate the good news from the expected market rout from the 300+ pts drop of Dow on Fri.
FY07 results is better than expected but H2 was hit by higher income tax.
What is more interesting is the announcement by Arrow that they have signed an agreement to buy the components distribution division of Achieva. Details of the deal is not known yet......... Ach will probably be making an announcement soon.
Akan datang!!!!!.........
bingo.
Ach's results are also out today, fyi. get it off the sgx website. http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_59B49874AB4D57C6482573FE0037BE05/$file/AL_FY2007.pdf?openelement
a brief run through the numbers shows it's profitable. this plus buying of components biz is good news.
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REFILE-Arrow Electronics to buy components business from Achieva
Feb 29 (Reuters) - Arrow Electronics Inc (ARW.N: Quote, Profile, Research) said it agreed to buy the components distribution business from Singapore-based Achieva Ltd (ACHL.SI: Quote, Profile, Research) to strengthen its position in the Southeast Asian markets.
Financial terms of the deal were not disclosed.
Arrow expects the deal to immediately add to earnings in the first twelve months by 1 cent to 3 cents per share. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Pratish Narayanan)
yesterday price up..., heard there is good news comming soon...
Noticed that Achivea has high volume today, almost x5 times of 5 days and x10 times of 30 days average volume. Moreover it has broken up the cup and handle at neck price of 0.185 at huge volume and closed above it at 0.195. I have vested at 0.21 last year and still holding till now. Can anyone share is there any postive news?
It seem dead for quite awhile.
If there's a RTO thingie going, can the involve parties delay such news? Just curious.
This counter is very quiet of late.
787180,
What is the status of the RTO you mentioned in you earlier posts?
Today up 2.5 cents a 15% increase. Hope tomorrow it will goes up again.
787180, What happened to your posting on 11 Oct about the sold off of one of its subsidiary ? Could it has failed ? Maybe that why the price drop from high 0.24. Maybe time to let go this counter?
Think should hold on... market look bad. May drop further.
Is it good time to buy Achieva?