Union Steel Holdings, one of the largest metal recycling companies in Singapore, has proposed the acquisition of 100% of the total issued share capital of Hock Ann Metal Scaffolding, a scaffolding provider to the construction industry.
The proposed acquisition will be executed in three tranches with Union Steel acquiring 60%, 20% and 20% equity stake of Hock Ann, over a period of three years. Each tranche will be priced at four times the audited consolidated profit after tax for the financial years ending 31 Dec 2011, 2012, and 2013. The total purchase consideration for the three tranches will be capped at $24 million.
Hock Ann provides all-round modular scaffolding for residential to large industrial sites. It has a strong track record for excellence and safety and counts prominent developers amongst its customers. Past projects included One Raffles Quay, One Raffles Link, One George Street, Changi Terminal 3, National Library, and the Mercedes Showroom and Service centre. Hock Ann has seen rising profitability over the last three years. For the financial year ended 31 December 2010, Hock Ann reported audited net profit after tax of $6.6 million.
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