Local service firm hopes to use IPO to expand its business

Advancer Global's exec chairman Desmond Chin (left) and his brother Gary, the firm's CEO. Along with their brother Francis, also a founding shareholder, they aim to expand in the niche markets they serve.
Advancer Global's exec chairman Desmond Chin (left) and his brother Gary, the firm's CEO. Along with their brother Francis, also a founding shareholder, they aim to expand in the niche markets they serve. PHOTO: LIANHE ZAOBAO

Home-grown service firm Advancer Global, the newest kid on the Catalist board when it lists on Monday, has received keen demand from investors.

At the close of the invitation at noon on Thursday, 1,887 valid applications from the public were received for the two million offer shares. This meant that the public offer was oversubscribed by 97 times.

Advancer Global offered 43 million shares - including two million for the public offer - at 22 cents apiece.

Its services include employment, cleaning, facility management and stewarding and security.

The invitation was about 5.5 times subscribed, based on an aggregate of the 43 million new shares offered and total valid applications of about 235.5 million new shares.

Institutional investor Havenport Asset Management subscribed for 8.2 million placement shares.

The business, which started in 1991 with a capital of more than $35,000, became most known for setting up Nation Employment, a leading domestic help agency that was incorporated in 1994.

Executive chairman Desmond Chin, 51, told The Straits Times yesterday that listing will help the firm raise the funds it needs to grow.

He said: "There are two strategies to grow our business - one is to grow organically and steadily. The other is to fast-track the process through acquisitions.

"We've been acquiring firms for some 10 years now. We are experienced and know the factors behind successful acquisitions."

He added that as a private firm, it can only turn to its own resources to fund acquisitions.

"Tapping the capital markets through the initial public offering (IPO) opens up more options of funds, which will be a good engine to boost our strategy."

Profit has been growing at a compound annual rate of 30 per cent since 2013. The firm reported earnings of $4.4 million last year.

Advancer Global plans to pay out 50 per cent of its net profit in financial years 2016, 2017 and 2018, said Mr Chin, adding that this was to give investors an option of considering the stock for dividend play.

His younger brother Gary Chin, 46, who is chief executive, said: "When we made acquisitions in the past, we had to wait a while for our funds to be 'replenished' before we could make the next one. With ready funds, we hope to continue to attract small and medium enterprises to join us."

Advancer Global has eight firms under its wing, and the Chin brothers - joined by Mr Francis, 59, the eldest brother, who is also one of the founding shareholders - aim to expand in the niche markets they serve.

One such market is security, specifically for shopping malls, which its unit KC Security, acquired in 2011, is good at.

A version of this article appeared in the print edition of The Straits Times on July 09, 2016, with the headline 'Local service firm hopes to use IPO to expand its business'. Print Edition | Subscribe