Local manufacturer Grand Venture Technology has registered its offer document for an initial public offering (IPO) on the Catalist board, and is eyeing expansion into the medical sector with proceeds from the offering.
Grand Venture, established in Singapore in 2012, provides engineering, assembly and testing services used in semiconductor manufacturing and the analytical life sciences industry. It has facilities in Singapore, Malaysia and China.
The company announced yesterday that it is looking to raise about $13.2 million in gross proceeds, in part by issuing new shares, making it the first IPO of this year. These comprise a public tranche of 800,000 shares and a placement tranche of 42,118,000 shares at 27.5 cents each.
Separately, investment holding company Sunshine Power has entered into an agreement with Grand Venture to subscribe for 5,095,000 shares at the same price.
Based on this price, the company's market capitalisation is expected to be about $64.4 million, it said yesterday.
It plans to start trading on Jan 23.
The money raised will go towards investing and enhancing operational and engineering capabilities, as well as expansion via mergers and acquisitions, joint ventures and partnerships. It will also help repay bank borrowings and serve as general working capital.
Chief executive Julian Ng, 46, said: "We believe the medical industry will bring us more stable business. It's not so cyclical... The barrier to entry is also high and once you enter, you are in it for the long term."
Founded by semiconductor industry veteran Ricky Lee, 57, Grand Venture mostly derives its revenue from multinational customers operating in Singapore and Malaysia.
We believe the medical industry will bring us more stable business. It's not so cyclical... The barrier to entry is also high and once you enter, you are in it for the long term.
GRAND VENTURE CEO JULIAN NG
The company's revenue has grown at a compounded annual growth rate of 87 per cent from $8.8 million in financial year 2015 to $30.9 million in financial year 2017. Revenue grew from $15.8 million in the first half of 2017 to $21.8 million in the same period last year.
Its net profit was $3.8 million in the financial year 2017, compared with a net loss of $2.4 million in the financial year 2015.
Mr Ng said the company is looking into areas in the medical industry such as medical imaging and diagnostics, as well as microscopes and surgical robots.
With companies in some of its existing industries - such as analytical life sciences - also moving to sell instruments to hospitals, Grand Venture's move will position it for deeper partnerships in their supply chains, he added.
Mr Ng said some of the proceeds will go towards transforming the company with automation, adding that it is also considering partnerships overseas to bring more capabilities to Singapore.
The company said its prospects are "buoyed by sustained demand for semiconductor capital equipment", supporting global demand for consumer electronics and wireless communication, among others.
In the analytical life sciences equipment segment, growth is expected to be driven by the prevalent use of mass spectrometry technologies in drug development and increased research and development spending by pharmaceutical companies, it said.