SINGAPORE (Mar 29): UMS Holdings announced that it is acquiring a 70% stake in non-ferrous metal alloys specialist, Starke Singapore.

The cash consideration for the acquisition will be determined based on the net tangible assets value per share of Starke for the financial period ended March which is still being prepared.

Based on Starke’s unaudited accounts for the financial year ended Dec 2017, the consideration shall be $7.1 million.

The acquisition will provide the group with a good opportunity to secure cost savings, improve gross margin and enhance business and operational synergies through upstream integration of the supply chain of raw materials.

In addition, it will also enhance the credibility of the order fulfilment of the group’s machining business.

The group intends to fund this acquisition via internal resources.

Andy Luong, chairman and CEO UMS, says, "This deal is both strategic and synergistic for UMS. We can gain from better economies of scale in view of the larger demand from UMS and other members of our group including JEP Holdings, which makes precision parts for the aerospace sector.”

Shares in UMS closed 1 cents higher at $1.17 on Thursday.