Uma Devi  Published on Tue, Sep 03, 2019 / 11:21 AM GMT+8

SINGAPORE (Sept 3): CSE Global on Monday announced it was acquiring a 100% stake in industrial power systems manufacturer Volta LLC via wholly-owned subsidiary CSE Americas.

  The consideration for the acquisition deal was US$25.1 million ($34.8 million), payable in cash and subject to adjustments for working capital amount. CSE Global will finance the deal using a combination of internal resources and bank borrowings.

  Volta is a US company that develops, designs, manufactures, and services custom-engineered electrical equipment centres (EEC) that distribute, control, and monitor the flow of electrical energy, and provide protection to motors, transformers, and other electrically powered equipment.

  In an SGX filing on Monday, CSE Global says the acquisition is in line with the group&rsquo s long-term plan to expand through acquisition of companies with specialised technologies complementary to its existing businesses and through geographical coverage.

  In addition, by combining CSE Global&rsquo s engineering, automation and instrumentation and electrical service capabilities with Volta&rsquo s capability to design and fabricate large-scale electrical equipment centres, the group says it will have a full-stream offering for the midstream energy and petrochemical industry.

  CSE Global says the acquisition of Volta will add $4.1 million to  FY2019 profit after tax. In FY2018, the group had recorded a profit after tax of $26.6 million. Even assuming FY18&rsquo s estimated net profit of US$3.6 million -- excluding tax on pretax net profit of US$4.9 million -- the deal would have been valued at a 6.9 times FY18 earnings. As at June 30, Volta had a net book value US$10.5 million.

  And while See believes CSE Global&rsquo s FY19F debt could increase to $70 million, she still views the acquisition as net profit accretive.

  &ldquo We are positive on this acquisition as it increases CSE Global&rsquo s depth in the onshore oil and gas market and supplements its growth. CSE Global continues to be our preferred small-cap O& G pick. We raise our target price to 68 cents from 60 cents previously, based on an unchanged 13.5x FY20F P/E,&rdquo says See.

 

1985: Commenced Operations
-	Engineering Projects Division of Chartered Electronics Industries (CEI)

 

1992 to 1995: Going Regional
-	Spun-off as CEI Systems & Engineering Pte Ltd
-	Establishes presence in Bangkok, Thailand
-	Establishes presence in Bangalore, India

 

1996 to 1999: Going Public
-	Management buy-out, renamed CSE Systems & Engineering Pte Ltd
-	Establishes presence in Kuala Lumpur, Malaysia
-	Awarded ISO 9001 Certification
-	Initial public offering on SESDAQ

 

2000: Going International
-	Acquires W-Industries (USA)
-	Transfers to main board of Singapore Exchange
-	Acquires Control Concepts and Technology (USA)
-	Acquires Transtel Engineering (Singapore)
-	Renamed ' CSE Global'
-	Acquires Uniserve Corporation (Australia)
-	Acquires Astib Group ( Australia)
-	Acquires 66% share in Power Diesel(S' pore)
-	Acquires 75% share of S3ID Group Limited (UK)

In the Australia two-way radio communications business where they have taken an inorganic approach to bolster their presence in the business.Revenue from the two-way radio communications business increased from S$5m in 2015 to S$46.9m in 2018.

The group has also completed four acquisitions in 2019 thus far, the most recent being  Volta  which serves oil and gas players in the midstream segment.

With the government&rsquo s emphasis on smart nation initiatives and the inclusion of digital defence as part of the overall Total Defence framework,Management shared that the focus for infrastructure in the near term will be on Singapore government-related projects further wins in this area will add to CSE&rsquo s growth momentum in years to come.

So,one can see this is a growth company and with Temasek coming onboard will bode well for CSE Global to expand their businesses locally and internationally.