Far East Group to acquire Singapore’s air-con firm for $7 million

The company will offer some of its shares to M-Tech’s current owners as part of the planned acquisition.

Singapore’s refrigeration & air-conditioning system provider, Far East Group Ltd. has recently announced plans to acquire the country’s renowned air-conditioning firm M-Tech Air-Con & Security Engineering for $7 million in cash.

As per reliable sources, the company will offer 2.98 million of shares to M-Tech’s current owners which will represent 2.75% of the existing issued shares and about 2.68% of the enlarged shares. Reportedly, the number of shares to be issued fall within the limits of a share mandate issued in 2018 that allows Far East to issue new shares that do not exceed 50% of the total number of allotted shares.

Sources cite that Far East will also pay $5.5 million to M-Tech’s owners and an amount up to $1.5 million across the fiscal years 2019 & 2020 based on a profit guarantee for M-Tech. The proposed amount will be funded through Far East Group’s internal resources and/or bank borrowings, add sources.

For the record, M-Tech is a Singapore-based firm owned by Lee Sui Fook and Quek Poh Chuan that provide Air-Conditioning and Mechanical Ventilation (ACMV) services for the residential and commercial building sectors. The company using its vast expertise in designs, advises, supplies and installs air-con systems that perfectly suit user requirements.

Commenting on the move, Far East said that the acquisition of M-Tech will certainly mean more sustainable income stream as the group will increase its revenue from commercial and residential air-conditioning systems and will further help to offer value-added services in the areas of energy-efficiency enhancement and building management services.

Far East said that the group sees great potential in the commercial sector and, with this acquisition, will move up the value chain with M-Tech’s engineering and mechanical capabilities.