SAM Engineering to acquire Aviatron for US$43m, funding via rights issue

SAM Engineering & Equipment (M) Bhd is set to acquire a 100% stake in Aviatron (M) Sdn Bhd, a manufacturer of aircraft structure parts and precision engineering components for approximately US$43.4 million in cash (around RM203.44 million). 

The acquisition is considered a related party transaction as SAM Engineering is purchasing the stake from its major shareholder, Singapore Aerospace Manufacturing Pte Ltd (SAMPL), which holds 62.49% of SAM Engineering. 

To fund this acquisition, SAM Engineering plans a renounceable one-for-four rights issue to raise approximately RM557.84 million.

Aviatron serves as the exclusive contract manufacturer of nacelle beams for Airbus 220, Airbus 350, and Boeing 787 aircraft. 

SAM Engineering aims to capture Aviatron’s order book and leverage expected recovery in the aerospace sector.

SAM Engineering currently operates in two business segments: aircraft engine casings, nacelle beams, and aero structure product manufacturing, as well as equipment engineering and solutions for semiconductor, hard disk drive, and related industries. 

The acquisition is expected to increase the aerospace segment’s revenue by 29.8% to RM430.72 million in the financial year ending March 31, 2023 (FY2023).

The acquisition will also facilitate the consolidation of business support functions and material management systems between SAM Engineering and Aviatron, eliminating related party transactions.

The company expects these transactions to be completed by the first quarter of 2024. –TMR