PARTNERSHIP aims to provide full range of services to Thai services eyeing deals
The recent partnership between TMB Bank and ING Corporate Finance Asia to provide services to Thai companies that seek to make overseas mergers and acquisitions (M&A), expects up to five outbound deals to be sealed in the next few years.
“TMB and ING have cooperated in areas where ING clients are interested in inbound M&A into Thailand or TMB clients are interested in outbound M&A,” TMB’s chief wholesale banking officer Senathip Sripaipan said.
“Funding Carmeuse and GP Group’s acquisition of Golden Lime was a recent example of such a TMBING partnership. We are expecting up to five outbound M&A deals in the next few years, each having the deal size of up to Bt2 billion.”
TMB and ING Corporate recently announced a partnership to provide a full range of services to Thai companies seeking to expand across borders through M&A.
They will help these companies in all sectors to expand in Thailand’s neighbouring countries, as well as in other parts of Asia and the world, depending on their strategies and capabilities, Senathip said.
The partnership has targeted TMB’s midsized customers, listed on the exchange or not, who have the capability and the interest to go overฌseas and are looking for the right opportunities. They are companies with annual sales of up to Bt10 billion.
Senathip added that while compaฌnies with sales greater than Bt5 billion were typically more willing to expand internationally, those with sales lower than Bt5 billion, which normally plan to expand domestically, now have shown more interest in exploring international M&A opportunities.
He said that midsized firms in Thailand had not been very active in the crossborder M&A market but TMB had spotted that Thai firms were becoming more interested in seeking overseas M&A deals, due to limited growth opportunities in the local marฌket. This was where TMB was able to support them in terms of advice and financing.
He added that for local M&A deals, TMB alone currently had five or six deals in the pipeline with an aggregate transaction value of between Bt3-4 billion.
A recent example of a crossborder and midsized M&A deal by a Thai company was the case of AAPICO Hitech, a car parts manufacturer, which this year invested around Bt3.5 billion to acquire a 25 per cent stake in car parts supplier Sakthi Global Auto Holdings.
Sakthi has operations in India, Europe and China, as well as research and development facilities in the United States, which AAPICO will be able to tap through this deal. TMB’s investment banking department helped AAPICO complete the transฌaction by providing credit facilities and advisory services.
Data collected by the Stock Exchange of Thailand shows that listed Thai companies are seeing a growing share of their revenues coming from overseas operations.
At the end of 2016, 198 firms, representing 39 per cent of all SETlisted companies, had invested abroad, 116 of them in the CLMV (Cambodia, Laos, Myanmar and Vietnam) counฌtries. In 2017, the CLMV countries are forecast to enjoy average GDP growth of around 7 per cent, compared with the 3.5 per cent growth forecast for Thailand.