French firm takes 80% stake in Wah Loon

Wah Loon's founder and managing director Alan Chong, seen here with Vinci Energies Asia Pacific's managing director Eric Devigne, will continue to run the firm after the sale to Vinci Energies, a unit of French construction giant Vinci.
Wah Loon's founder and managing director Alan Chong, seen here with Vinci Energies Asia Pacific's managing director Eric Devigne, will continue to run the firm after the sale to Vinci Energies, a unit of French construction giant Vinci.PHOTO: WAH LOON ENGINEERING

A unit of French construction giant Vinci has bought about 80 per cent of home-grown mechanical and engineering solutions provider Wah Loon Engineering.

The stake is estimated to be worth about $250 million, according to broker calculations. Following the transaction, Wah Loon founder and managing director Alan Chong will become a minority shareholder but still run the firm.

Dymon Asia Private Equity, which holds a significant minority stake, will fully divest its shares as part of the deal. It invested $40 million in the company in 2015.

Wah Loon, which has been operating for 30 years, started as a 10-person team but now has a headcount of around 350.

Turnover has surged from $2 million in 1990 to around $200 million in 2016. The company also came in first at the 2011 Enterprise 50 Awards, which celebrates the top 50 most enterprising privately held companies in Singapore.

Mr Chong will stay in charge of the business and remain as managing director after the sale to Vinci Energies Asia Pacific, a unit of the French company. He said the deal will allow Wah Loon to go international by tapping Vinci's strengths.

"I will still be the driver of the company. My vision is to bring Wah Loon to the next level," he said.

Vinci Energies, a global player in energy efficiency, renewable energy and complex system integration, will boost the firm's expansion plans in the Asia-Pacific, he added.

Wah Loon now operates in Singapore and Malaysia. The first market Mr Chong is keen to enter is Indonesia, where Vinci Energies has significant presence, he said. This would mean ramping up headcount. Current staff will get the opportunity for overseas postings and to learn from new business environments.

Mr Chong hopes the tie-up will enable Wah Loon to utilise the parent company's resources, network and experience to grow, as well as to improve internal processes.

He is not concerned about no longer being the controlling shareholder of the business he built from scratch: "It's like a marriage - you have to pick the right person. We have similar culture and values."

He said there were many suitors in the past few years, but not all fitted the bill: "When I pick, I pick one of the best." He pointed to Vinci's impressive track record, with revenues of €40 billion (S$64 billion) and a market capitalisation of over €45 billion. Last year, Vinci Energies' revenue was about €10.8 billion.

Vinci Energies said the acquisition is in line with its strategy of strengthening its business in the Asia-Pacific, where it already operates in New Zealand, Australia, Indonesia and India.

Its managing director Eric Devigne said Wah Loon's business will complement its core services. "We plan to leverage our global reach and comprehensive business network to drive potential synergies across both businesses."

A version of this article appeared in the print edition of The Straits Times on April 07, 2018, with the headline 'French firm takes 80% stake in Wah Loon'. Print Edition | Subscribe