Tong Hsing set to acquire Kingpak in share swap

Highly complementary: Tong Hsing Electronic Industries plans to acquire Kingpak to increase its product portfolio and boost its market competitiveness

Tong Hsing Electronic Industries (????), which provides microelectronic module assembly and packaging as well as thick-film/thin-film substrate foundry services, plans to acquire Kingpak Technology (??) in a bid to increase its economies of scale through a larger product portfolio and enhance its competitiveness in the market.

Kingpak is a testing and packaging service provider of automotive complementary metal-oxide-semiconductor (CMOS) image sensors.

Tong Hsing, based in New Taipei City’s Yingge District (??), plans to acquire all of the shares in Kingpak, which is headquartered in Hsinchu County’s Jhubei City (??), after its board of directors approved a share-swap deal, the company said in a Taiwan Stock Exchange filing on last week.

In the filing, Tong Hsing said it plans to issue 72.27 million new shares to exchange for Kingpak shares, with the share swap ratio set at one Kingpak share per 1.244 Tong Hsing shares.

Tong Hsing shares closed at NT$151 on the Taiwan Stock Exchange and Kingpak traded at NT$164 on the Taipei Exchange.

The firms hope to complete the deal by June 30 after approval from the authorities and expect to seize emerging opportunities in the smartphone, advanced driving, the Internet of Things, the Internet of Vehicles, virtual reality and augmented reality markets, the filing said.

The two companies have little overlap in customers and products, but they are highly complementary,” Tong Hsing president Heinz Ru (???) said at a press conference at the Taiwan Stock Exchange.

Tong Hsing, which has exposure to metalized ceramic substrates and the image-sensor back-end business for consumer electronics, reported a net profit of NT$495.32 million (US$16.4 million) in the first three quarters of this year, down 31.1 percent from NT$718.85 a year earlier, with earnings per share (EPS) of NT$3.

Consolidated revenue decreased 1.35 percent year-on-year to NT$6.75 billion in the first 11 months of the year, company data showed.

Kingpak, established in 1997, is a niche CMOS image sensor packaging company. The company has in recent years explored the advanced driver-assistance system business to develop new packaging technology that is thinner and lighter, with high reliability and cost competitiveness in order to meet market requirements.

The firm’s revenue in the first 11 months increased 0.57 percent annually to NT$2.1 billion, while net profit in the first three quarters fell 36.64 percent to NT$229.27 million, with EPS of NT$4.46.

Kingpak is to become a wholly owned unit of Tong Hsing and be delisted from the Taipei Exchange when the merger is completed in June next year