Tech Group Asia Ltd. is pooling its resources with another large Asian company to create one of that region's major precision molders and mold makers.
Tech Group Asia will merge with Sunningdale Precision Industries Ltd. in a stock-swap deal announced Jan 11. Combined, the two Singapore-based companies have sales of S$268.9 million (US$156.5 million) and 23 plants spread across China, Singapore, Malaysia, Indonesia and Mexico.
The new company, to be called Sunningdale Tech Ltd., is expected to start operations in June once the merger is finalized, the companies said.
Both firms are traded on the Singapore Stock Exchange. Tech Group Asia will issue 363 million new shares to Sunningdale stockholders in exchange for existing Sunningdale shares.
Company ownership will be parsed evenly. Tech Group Asia and Sunningdale Precision shareholders each will hold about half the stock in the new company. Of Sunningdale Tech's nine directors, three will come from both Tech Group Asia and Sunningdale Precision, with the other three coming from outside the firms.
Tech Group Asia Chief Executive Officer Neo Age Seng and Sunningdale Precision Executive Chairman Ng Boon Hool will become joint chief operating officers of the new company.
Tech Group Asia was formed in 2003 by Scottsdale, Ariz.-based injection molder Tech Group Inc. and Omni Mold Ltd of Singapore. Tech Group owns about 46 percent of the Asian firm, and Tech Group Chairman Steve Uhlmann heads its board. Several partner companies in Asia that work with Tech Group also are involved in Tech Group Asia.
Tech Group Asia molds parts and makes tools for consumer, medical and information-technology products and has 10 plants, including three fairly new sites in China. The company recorded sales of S$158.4 million (US$92.2 million) for the 12 months ended June 30.
Sunningdale Precision focuses on the automotive and telecommunications industries, where it performs injection molding, makes tooling and assembles parts. The company, founded in 1984, has 13 plants, including one in Mexico, and recorded sales of S$110.4 million (US$64.3 million) for the 12 months ended June 30.
The combined companies will have 471 presses and 1.62 million square feet of manufacturing.
Sunningdale Tech hopes to capture some of the high-precision molding work that is being outsourced from North America and Europe.
The firms will continue to focus on four core areas: consumer, medical, automotive and telecommunications work, said Koh Boon Hwee, executive director of Tech Group Asia. He will become chairman and CEO of Sunningdale Tech.
``As the trend for outsourced manufacturing gathers pace in these four areas, capability, size and geography will matter more,'' Hwee said.
Tech Group Chairman Uhlmann said the companies have the size and combination of resources to accelerate growth. A Tech Group spokeswoman did not return a phone call seeking comment.
Tech Group ranked 53rd on Plastics News' listing of North American injection molders, with $120 million in related sales in 2003.