Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Excelpoint Tech (EXLP SP): Scheme Doc Out. 10th August Shareholder Meeting

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wt-microelectronics-co-ltd" target="_blank" data-smartkarma-citation="entities:19712:1" rel="noopener"><strong>WT Microelectronics (3036 TT)</strong></a> has entered into an agreement to acquire electronic component distributor  <strong><a href="https://www.smartkarma.com/entities/excelpoint-technology-ltd" target="_blank" data-smartkarma-citation="entities:1774:1" rel="noopener">Excelpoint Technology (EXLP SP)</a></strong> by way of a Scheme at a cash consideration of S$1.93/share.</li>
<li>This is an Offer premium 7.8% to last close but a 21.4% premium prior to the announcement Excelpoint was in <a href="https://www.smartkarma.com/compose/insight/68454/WT%20Micro%E2%80%99s%20Offer%20For%20Excelpoint%20Tech%20Event-Driven%200%20Views%20,%2014%20Apr%202022%2010:17%20EXECUTIVE%20SUMMARY%20%20WT%20Microelectronics%20(3036%20TT)%20has%20entered%20into%20an%20agreement%20to%20acquire%20electronic%20component%20distributor%20%20Excelpoint%20Technology%20(EXLP%20SP)%20by%20way%20of%20a%20Scheme%20at%20a%20cash%20consideration%20of%20S%241.93/share.%20This%20is%20an%20Offer%20premium%207.8%%20to%20last%20close%20but%20a%2021.4%%20premium%20prior%20to%20the%20announcement%20Excelpoint%20was%20in%20discussions%20with%20a%20third%20party%20involving%20the%20company's%20shares.%20Albert%20Phuay%20(founder%20and%20CEO)%20will%20reinvest%20part%20of%20his%20cash%20consideration%20under%20the%20Scheme%20in%2020%%20equity%20of%20the%20Acquiring%20Entity,%20with%20the%20balance%2080%%20stake%20owned%20by%20WT.%20%20DETAIL%20%20The%20Offer%20WT%20Semiconductor%20is%20Offering%20S%241.93/share%20by%20way%20of%20a%20Scheme%20for%20all%20Excelpoint%20shareholders.%20A%20final%20dividend%20of%20S%240.088/share%20was%20announced%20on%2016%20February%202022%20-%20page%2019.%20For%20the%20avoidance%20of%20doubt,%20the%20Target%20Shareholders%20as%20at%20the%20Record%20Date%20(29%20April)%20will%20be%20entitled%20to%20receive%20and%20retain%20the%20Final%20FY2021%20Dividend%20in%20addition%20to%20the%20Scheme%20Consideration.%20The%20ex-date%20is%20the%2028%20April,%20and%20payment%20on%20the%2013%20May.%20%20Condition.%20Shareholder%20vote%20-%20this%20requires%20the%20approval%20of%20a%20majority%20of%20shareholders%20in%20number%20(headcount%20rule)%20representing%2075%%20in%20value%20of%20shares%20voted%20at%20a%20scheme%20meeting.%20See%20Quiddity%20Singapore%20M&amp;A%20Guide%202019%20for%20more%20info%20on%20Schemes%20in%20Singapore.%20%20Irrevocables.%20Irrevocable%20undertaking%20total%2050,513,372%20shares%20or%2041.98%%20of%20shares%20out.%20These%20irrevocables%20are%20from%20Albert%20Phuay%20Yong%20Hen%20(39.82%),%20Han%20Jiak%20Siew%20(2.02%%20-%20Phuay's%20wife),%20and%20AP21%20Holdings%20(0.14%),%20a%20vehicle%20controlled%20by%20Phuay.%20Switch%20Option.%20In%20the%20event%20of%20a%20competing%20offer,%20WT%20has%20the%20right,%20subject%20to%20prior%20consultation%20with%20the%20SIC,%20to%20proceed%20by%20way%20of%20a%20voluntary%20conditional%20cash%20offer.%20%20If%20the%20Switch%20Option%20is%20exercised,%20WT%20will%20make%20the%20Offer%20on%20the%20same%20or%20better%20terms%20as%20those%20which%20apply%20to%20the%20Scheme,%20and%20an%20acceptance%20condition%20set%20at%20only%20more%20than%2050%.%20MACs/Prescribed%20Occurrences.%20This%20includes%20no%20more%20than%20a%2010%%20decline%20in%20revenue%20or%20EBITDA%20-%20see%20pages%209-10.%20Anything%20else?%20The%20founder%20and%20CEO%20of%20Excelpoint,%20Albert%20Phuay,%20will%20reinvest%20part%20of%20the%20cash%20consideration%20due%20to%20him%20under%20the%20Scheme%20in%2020%%20equity%20of%20the%20%22Acquiring%20Entity%22,%20with%20the%20balance%2080%%20stake%20owned%20by%20WT.%20%20Albert%20Phuay%20will%20continue%20to%20be%20the%20CEO%20of%20Excelpoint.%20The%20Proposal%20Data%20Point%20Data%20in%20the%20Data%20Point%20The%20Deal%09Scheme%20Offeror%09WT%20Microelectronics%20(3036%20TT)%20%20Target%09Excelpoint%20Technology%20(EXLP%20SP)%20%20Terms%20%09%241.93/share,%20cash.%20Deal%20size:%20US%240.2bn.%20Conditions%09%20Scheme%20vote.%20SIC%20sign-off%20%20Dividends?%09%20Yes%20-%20S%240.088/share%20to%20be%20added.%20%20Source:%20Announcement%20On%20Pricing%20The%20Scheme%20Consideration%20also%20represents%20a%20premium%20of%2058.2%%20over%20the%20NAV%20%20as%20at%2031%20December%202021%20%20Source:%20Announcement%20%20Timetable%20Tentatively%20looking%20at%20an%20effective%20date%20in%20mid-September.%20%20Source:%20Announcement%20%20On%20Excelpoint%20%20Excelpointwas%20incorporated%20in%20Singapore%20on%2018%20May%202001%20and%20was%20listed%20on%20the%20Mainboard%20of%20the%20SGX-ST%20on%207%20January%202004%20at%20S%240.26/share.%20Excelpoint%20is%20a%20regional%20electronics%20component%20distributor%20in%20the%20Asia%20Pacific%20region.%20It%20offers%20electronic%20components,%20engineering%20design%20services,%20and%20supply%20chain%20management%20to%20original%20equipment%20manufacturers,%20original%20design%20manufacturers,%20and%20electronics%20manufacturing%20services.%20Excelpoint's%20suppliers%20include%20Analog%20Device%20(ADI),%20Microchip,%20Qorvo,%20Qualcomm,%20and%20Samsung,%20among%20others.%20The%20company%20now%20works%20closely%20with%20over%204,000%20customers.%20Recent%20Results.%20FY21%20revenue%20was%20up%2044.2%%20to%20US%241.6bn.%20Net%20profit%20increased%20137.2%%20to%20US%2424.5mn.%20%20The%20Board%20proposed%20an%20ordinary%20dividend%20of%20S%240.04/share%20and%20a%20special%20dividend%20of%20S%240.048/share,%20and%20was%20approved%20at%20the%20AGM.%20Abridged%20Fundamentals%20%20Shareholders%20%20Excelpoint%20placed%20out%20those%20shares%20to%20Alonim%20Investments%20on%20the%202%20September%202016%20at%20S%240.55/share.%20Alan%20Kwan%20is%20a%20director.%20I%20don't%20know%20why%20he%20hasn't%20given%20an%20irrevocable.%20Still,%20the%20Offer%20has%20board%20support.%20%20On%20WT%20%20WT%20was%20founded%20in%201993,%20and%20is%20one%20of%20the%20global%20leading%20distributors%20of%20semiconductor%20components.%20WT's%20FY21%20revenue%20was%20~US%2416bn.%20WT%20currently%20partners%20with%20over%2080%20suppliers%20across%20every%20major%20technology%20segment%20to%20serve%20over%208,000%20customers%20worldwide.%20Why%20The%20Deal?%20There%20are%20strong%20synergies%20between%20both%20companies:%20The%20enhanced%20complementary%20product%20line%20offerings%20will%20allow%20for%20business%20expansion.%20Most%20importantly,%20with%20the%20experienced%20teams%20and%20footprints%20from%20both%20companies,%20customers%20will%20benefit%20from%20the%20extensive%20product%20solutions%20and%20technical%20support%20provided%20by%20the%20WT%20group,%20allowing%20them%20earlier%20access%20to%20the%20market.%20%20In%20addition,%20the%20established%20customer%20bases%20combined%20would%20significantly%20improve%20the%20distribution%20capabilities%20and%20customer%20portfolios%20of%20WT%20in%20the%20Asia%20Pacific%20region.%20Cross%20selling%20of%20various%20products%20to%20the%20customers%20of%20Excelpoint%20and%20WT%20would%20not%20onlyrealise%20potential%20synergies%20for%20the%20enlarged%20WT%20group,%20but%20also%20bring%20more%20demand%20creation%20opportunities%20for%20the%20suppliers.%20%20Peer%20Comparison%20Excelpoint%20appears%20inexpensive%20versus%20peers.%20%20On%20a%20trailing%20EV/EBITDA%20basis,%20Excelpoiint%20has%20traded%20at%20a%209%%20discount%20to%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%2048%.%20Excelpoiint%20has%20traded%20at%20a%2020%%20discount%20to%20SGX%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%2044%.%20Excelpoint's%20average%20trailing%20EV/EBITDA%20over%20that%20time%20is%209.7x%20and%20it%20is%20currently%20at%206.2x.%20%20On%20a%20trailing%20PER%20basis,%20Excelpoiint%20has%20traded%20at%20a%2034%%20discount%20to%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%2040%.%20Excelpoiint%20has%20traded%20at%20a%2013%%20discount%20to%20SGX%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%2021%.%20Excelpoint's%20average%20trailing%20PER%20over%20that%20time%20is%2011.7x%20and%20it%20is%20currently%20at%206.5x.%20%20On%20a%20trailing%20P/B%20basis,%20Excelpoiint%20has%20traded%20at%20a%2025%%20discount%20to%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%20a%2069%%20premium.%20Excelpoiint%20has%20traded%20at%20a%2023%%20premium%20to%20SGX%20peers%20over%20the%20past%20three%20years.%20It%20is%20currently%20118%.%20Excelpoint's%20average%20trailing%20P/B%20over%20that%20time%20is%200.7x%20and%20it%20is%20currently%20at%201.5x.%20%20Share%20Price%20Performance%20Optically,%20this%20is%20a%20decade-high%20Offer%20price.%20%20%20Excelpoint%20has%20been%20a%20clear%20outperformer%20versus%20its%20peer%20group.%20%20%20Conclusions%20Last%20There%20appears%20enough%20here%20to%20get%20over%20the%20line.%20%20.%20%20The%20Trade:%20Trading%20at%20a%204.6%%20gross%20spread,%20including%20the%20dividend,%20which%20is%20paid%20this%20time%20next%20month.%20That%20looks%20attractive.%20Get%20involved,%20although%20this%20is%20not%20a%20super%20liquid%20arb%20situation." target="_blank" rel="noopener">discussions</a> with a third party involving the company's shares.</li>
<li>Albert Phuay (founder and CEO) will reinvest part of his cash consideration under the Scheme in 20% equity of the Acquiring Entity, with the balance 80% stake owned by WT. </li>
</ul>



WT Microelectronics (3036 TT) has entered into an agreement to acquire electronic component distributor  Excelpoint Technology (EXLP SP) by way of a Scheme at a cash consideration of S$1.93/share.
This is an Offer premium 7.8% to last close but a 21.4% premium prior to the announcement Excelpoint was in discussions with a third party involving the company's shares.
Albert Phuay (founder and CEO) will reinvest part of his cash consideration under the Scheme in 20% equity of the Acquiring Entity, with the balance 80% stake owned by WT. 


Excelpoint Technology

WT Micro's Offer For Excelpoint Tech