CFA Society Singapore
SINGAPORE (Jan 29): Advance SCT has entered into a conditional sale and purchase agreement to acquire 40% stake in N&T Engineering Enterprises for up to $3.5 million.
The purchase price will be fully satisfied via the issuance of new shares at 0.1 cent each.
The initial $2.8 million will be paid upon completion of the deal, while the remaining $0.7 million is to be paid when N&T Group – comprising N&T and newly-incorporated N&T Smart Engineering – achieves net profit after tax of at least $1.2 million for the full year ending Feb 28, 2019.
A Singapore-based mechanical and electrical (M&E) company specialising in engineering for Mission-Critical Facilities and Infrastructure (MCFI) and Mission-Critical System (MCS), N&T recorded an unaudited NPAT of approximately $0.64 million for the six months ended August.
It currently has an order book of approximately $21.4 million, excluding materials procurement, to be delivered over the next one to two years.
N&T currently owns 100% of N&T Smart Engineering, which was incorporated in August 2018 but has not yet commenced business.
Upon completion of the proposed acquisition, N&T shall transfer its entire stake in the newly-incorporated N&T Smart to Advance SCT for a consideration of $1.
Under the business platform of Advance SCT, N&T Smart is expected to then spearhead new growth initiatives primarily in research and experimental development. This will include system development and system integration relying on integrated use of Internet of Things (IoT) and artificial intelligence (AI).
Advance SCT intends to leverage on N&T’s capabilities and track record to pursue accelerated growth under Singapore’s Smart Nation initiatives.
The company in November announced its proposed business diversification plans, and said it is eyeing a change of name to Citicode Ltd to reflect the new business direction.
The proposed acquisition is subject to shareholders’ approval to be first obtained at an EGM to be convened on Feb 12 for the proposed diversification.
"The acquisition will enable us to potentially participate, operate, manage and fund specialised M&E projects of larger scale, in an integrated manner and under the smart city initiatives, jointly with N&T,” says Teh Wing Kwan, executive chairman and chief executive officer of Advance SCT.
“Next is to structure an efficient commercial eco-system for us to be equipped with IoT and AI capabilities via strategic partnerships in supporting smart FM (Smart Facilities Management) as tech-driven investments seem to have been accelerating in engineering sectors specifically for productivity improvement, predictive maintenance and communication efficiencies,” he adds.
“The transaction presents an essential platform for N&T to grow much faster jointly with a publicly listed company beyond our traditional sub-contracting model which we could effectively expand our scales of operations and improve our supply chain management,” says Ngian Teck Giok, founder and CEO of the N&T Group.
Shares in Advance SCT closed flat at 0.1 cent on Tuesday.