SINGAPORE - Private equity fund Novo Tellus has agreed to subscribe for close to 27 million new shares in Mainboard-listed precision and motion control engineering firm ISDN Holdings at $0.20 per share.
The new shares amount to a 6.4 per cent stake in ISDN's enlarged share capital. The investment is expected to close in April, and Novo Tellus will take a seat on ISDN's board.
The subscription will raise about $5.3 million in net proceeds, and will finance ISDN's growth strategy in serving Asia's advanced manufacturing and clean energy sectors, it said.
The subscriber is a wholly owned subsidiary of Novo Tellus PE Fund 2. Novo Tellus makes private equity investments in the technology and industrials sector of South-east Asia, with a focus on mid-market companies.
Novo Tellus managing partner Loke Wai San said: "Our fund invests in rising stars in South-east Asia's manufacturing and industrial economy and ISDN presents a compelling opportunity to invest behind the transformation underway in Asia's factories. It's clear that Asia's industrial producers are embracing greater levels of automation and increasingly moving towards Industry 4.0 manufacturing practices."
He noted that the industrial automation market in Asia is estimated to exceed S$40 billion by 2020: "ISDN... has already delivered automation solutions to over 10,000 industrial customers to date, and its deep customer relationships, advanced engineering capabilities, and strategic market presence in key manufacturing markets like China, Thailand, Vietnam, Singapore, Hong Kong and Malaysia should enable the company to serve the increasingly sophisticated automation needs of Asia's manufacturing industry."
Mr Loke is also executive chairman of Singapore-listed AEM Holdings.
Keith Toh, partner at Novo Tellus, said: "ISDN has kept a low profile in the public market while patiently building its core automation business and developing its emerging energy business. We believe investors will increasingly see the results of the company's patient strategy in the coming years, and we look forward to a partnership with ISDN that helps realise strong returns to ISDN's solid positions in the attractive industrial automation and clean energy markets."
ISDN shares gained two cents or 10 per cent to trade at $0.22 as at 9.30am on Thursday (Feb 28).