KEM - The One That Got Acquired Before I Could Write Extensively
Short Post
With the start of Crazy Portfolio, TUBInvesting new direction is to be the diary of the portfolio and to put up post about my journey to eventually achieve my crazy target!
Thus, it was natural that I wanted to record down all the companies that was part of this portfolio.
However, this company, Kemet Corporation was acquired by Taiwan-based electronic component manufacturer Yageo for $27.20/share in cash, for a deal valued at $1.8B including the assumption of debt, before I could even do a proper write up.
Read about the acquisition here
I personally feel the purchase price is too low. Anything above US$30 will be more reasonable.
To give you some perspective, the 2018 10-k stated the following:
1. "...The Company has entered into agreements with three of its largest customers pursuant to which the customers have agreed to provide interest free loans to the Company in exchange for assurance of future supply. These interest free loans are being used by the Company to fund the purchase of certain production equipment and to make other investments and improvements in the Company and its operations in order to increase its overall capacity to produce various electronic components." Which customer, in the right mind, will give their supplier interest free loan?
2. "Our customer base includes most of the world’s major electronics original equipment manufacturers (“OEMs”)....Major OEMs: • Bosch Group, Cisco Systems Inc., Continental AG, Delphi Technologies PLC, Tesla Inc., and Denso in the automotive segment. • Apple Inc., Western Digital Corporation, Dell Inc., Nintendo, and Google LLC in the Computer and consumer segment. • ABB Group...." Just look at the customers!
Thus, I do hope some other company will come up with a better offer!
For those that is interested in the daily discussion of US, HK and SG companies, feel free to join our Fundamental Scorecard Telegram Group.
With the start of Crazy Portfolio, TUBInvesting new direction is to be the diary of the portfolio and to put up post about my journey to eventually achieve my crazy target!
Thus, it was natural that I wanted to record down all the companies that was part of this portfolio.
However, this company, Kemet Corporation was acquired by Taiwan-based electronic component manufacturer Yageo for $27.20/share in cash, for a deal valued at $1.8B including the assumption of debt, before I could even do a proper write up.
Read about the acquisition here
I personally feel the purchase price is too low. Anything above US$30 will be more reasonable.
To give you some perspective, the 2018 10-k stated the following:
1. "...The Company has entered into agreements with three of its largest customers pursuant to which the customers have agreed to provide interest free loans to the Company in exchange for assurance of future supply. These interest free loans are being used by the Company to fund the purchase of certain production equipment and to make other investments and improvements in the Company and its operations in order to increase its overall capacity to produce various electronic components." Which customer, in the right mind, will give their supplier interest free loan?
2. "Our customer base includes most of the world’s major electronics original equipment manufacturers (“OEMs”)....Major OEMs: • Bosch Group, Cisco Systems Inc., Continental AG, Delphi Technologies PLC, Tesla Inc., and Denso in the automotive segment. • Apple Inc., Western Digital Corporation, Dell Inc., Nintendo, and Google LLC in the Computer and consumer segment. • ABB Group...." Just look at the customers!
Thus, I do hope some other company will come up with a better offer!
For those that is interested in the daily discussion of US, HK and SG companies, feel free to join our Fundamental Scorecard Telegram Group.
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