LCY Chemical Corp (李長榮化工) and a consortium led by New York-based KKR & Co yesterday announced the completion of a NT$47.8 billion (US$1.55 billion) takeover deal, effectively privatizing the Taiwanese company and delisting it from the Taiwan Stock Exchange.
The companies said that they had completed a share exchange and purchase transaction first announced in July last year, under which the KKR-led consortium would acquire all of the issued shares of LCY at NT$56 per share in cash, including a divided per share of NT$2.9.
The Taiwanese company is entering its next growth stage in a partnership with KKR, a private equity firm with a strong track record, LCY chairman Hung Tsai-hsing (洪再興) said in a statement.
LCY would be leveraging KKR’s expertise to accelerate its strategy and navigate the evolving needs of the Taiwanese and global markets, it said.
LCY is to maintain its corporate headquarters in Taipei, its global distribution and sales networks, and its production plants in Taiwan, China and the US, it said.
As a private company with the backing of KKR, LCY would be able to launch acquisitions of its peers much more quickly, Hung was quoted as saying in a report by Chinese-language Credere Media yesterday.
As LCY’s share price has struggled since its was found responsible for the 2014 Kaohsiung gas pipeline explosions, the company has been at a valuation disadvantage, which has made acquisitions and growth difficult, he said.
While its peers’ shares were trading at a price-to-earnings ratio of 15, LCY was languishing at a range between 7 and 9, Hung said.
For privately held companies, acquisition bids do not require lengthy government approval processes when opportunities emerge, Hung said.
Hung is aiming to have LCY return to the capital market in five to seven years as a stronger and more profitable company.
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