To fuel acquisition, Cirtek mulls over P2B offering
MANILA, Philippines–Semiconductor manufacturer Cirtek Holdings Philippines Corp. is considering a follow-on public offering of equities worth around P2 billion this year to fund a prospective acquisition.
Cirtek’s chief finance officer Anthony Buyawe said the Laguna-based company would evaluate several acquisition opportunities.
Cirtek, he added, hoped to close a deal late this year or early 2016.
Cirtek is interested in “bite-sized” companies worth about $40 million to $50 million.
“But we’re flexible. If it makes sense for us, we’re willing to consider a larger acquisition,” Buyawe said.
In 2014, Cirtek’s consolidated revenues amounted to $52 million, about 18 percent higher than that of the previous year. Net profit last year rose by 45 percent to $6.8 million on the back of higher sales, improved profit margin and gains from a recent acquisition.
Last year, Cirtek bought Remec Broadband Wireless International Inc., thereby acquiring radio frequency (RF), microwave and millimeterwave capabilities. Since then, it continued to manufacture and ship microwave radio products to over 30 global customers.
The new acquisition, with only five months of operations booked in 2014, already contributed about 20 percent in revenue that year. During its first full year of consolidation with Cirtek this year, the new business is expected to contribute at least 35 percent of total business, Buyawe said.
Overall, he estimated that Cirtek could grow revenues by up to 70 percent this year.
Over the long term, the new unit may even become the group’s flagship business, Buyawe said. It is also expected to jack up Cirtek’s overall margins as the new unit churns out high-value products.
Cirtek is now ready to expand its current customer base by introducing new products this 2015. It expects to win new customers by adding sales representatives in the United States, Asia and Europe.–Doris C. Dumlao