CPL board green-lights Pangolin M&A deal

Corporate January 12, 2017 01:00


CPL GROUP’S board on Tuesday resolved to acquire Pangolin Safety Products Co, a manufacturer and supplier of safety equipment, in a deal worth Bt531 million.

The target company’s entire business would be transferred to CPL in exchange for 15.49 million shares to be issued at Bt34.28 per share, which would raise CPL’s registered capital from Bt264 million to Bt418.9 million. 

The Wongcharoensin group of shareholders has declared its intention to make a tender offer for the shares. 

The proposed deal, the first major business revamp after CPL’s listing on the Stock Exchange of Thailand 22 years ago, would grow the company’s assets and sales significantly.

Suwatchai Wongcharoensin, vice managing director of CPL, a Charoensin Group company that is a major tannery in Southeast Asia, said yesterday that the capital-increase shares would be privately placed with Pangolin in exchange for Pangolin’s business. 

The equity stake in CPL of the Wongcharoensin group would rise from 51.3 per cent to 69.3 per cent. 

The company has called an extraordinary shareholders’ meeting on February 23 to vote on the transactions.

“The proposed merger between CPL and Pangolin would be an entire business transfer from Pangolin to CPL,” Suwatchai said. “After completion, CPL would be the sole surviving company, and, of course, CPL’s asset size would increase. 

“It would be CPL’s first major overhaul in almost 22 years after the listing on the Stock Exchange of Thailand in 1994, as the company would transform itself from one of Southeast Asia’s major manufacturers and suppliers of leather-tanning products to global shoe brands into an integrated provider of upstream to downstream business products, including Pangolin’s core products – safety and personal protective equipment – which are downstream business products.” 

Pangolin manufactures and supplies a comprehensive range of safety and personal protective equipment that meet international standards. They include protection equipment for the feet, eyes and face, and for the human body’s respiratory and hearing systems. 

Its products satisfy international standards, and its safety-shoe products command the largest share in the segment, CPL says. 

Its major customers are industrial plants and state enterprises in Thailand. It also has authorised dealers and distributors in Indochina and exports to several markets globally. 

It earned profit of Bt36.6 million on sales of Bt445.2 million in the first nine months of last year.

The proposed acquisition of Pangolin, whose business grows in line with national industrial and economic growth, would lead to CPL’s rapid growth and strengthen its business, Suwatchai said.