News blog
LED International
- BY: Andrew Hore |
- POSTED: 31/07/2008 |
LED International is acquiring LED products manufacturer Strongbase New Shenzhen Ltd for HK$5.5m.
Strongbase was formed in 2006 and employs 40 people. It made a profit of £70,000 on turnover of £652,000 in 2007. Customers include GE, Sanyo, Ford and Philips.
There was a positive response to the news with the shares jumping 0.25p to 1p, valuing LED at £1.78m. LED joined Aim on 23 October 2006, when it raised £500,000 at 10p a share.
The purchase price is equivalent to around £350,000. Just over half is payable in cash and the rest in shares at 1p each. The owner of Strongbase is Bun Lee, who is already a LED shareholder. His stake will increase to 25.75%.
China-based LED manufactures low power LED screens as well as LED lamps and other products. It is also building up a screen rental business to generate revenues from brands that want to use the screens to advertise.
Most of the management has been replaced in the past year and the focus is to grow the business. The company’s factory still has spare capacity. The plan is to make acquisitions to increase the size of the business, move into new markets and further increase capacity.
Strongbase will increase the product range although it also brings extra production capacity with it. Those additional products may still provide additional work for LED’s existing facilities as well. The vice president of Strongbase will take over as chief technology officer for the group.
LED’s chief executive is a director of Strongbase so LED knows what it is acquiring.
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