Information on the Target

DKSH has successfully acquired CLMO TECHNOLOGY SDN BHD (“CLMO”), a reputable calibration and testing laboratory specializing in the semiconductor, automotive, oil & gas industries, as well as in academia and research institutions. Situated in Malaysia and Vietnam, CLMO has established itself as a significant player in these sectors, providing a comprehensive suite of services that encompass the entire value chain. This includes pre-sales consulting, sales, equipment customization, installation, service training, technical support, maintenance, and calibration services.

Founded in 1993 and headquartered in Kuala Lumpur, CLMO employs approximately 50 professionals and generates annual net sales close to CHF 10 million. With a strong track record of profitability and established relationships with prominent clients, CLMO is well- positioned for synergy within DKSH’s Business Unit Technology. The acquisition entails 100% ownership of CLMO, with 75% of its net sales attributed to the Semiconductor & Electronics business line and the remaining 25% to Scientific Solutions, facilitating further growth in these key segments.

Industry Overview in Target’s Specific Country

The semiconductor and electronics industry in Malaysia is a critical component of the country's economy. Malaysia stands as one of the top exporters of semiconductors globally, benefiting from its strategic location and well-established manufacturing infrastructure. This industry has witnessed significant investments and advancements in technology, solidifying Malaysia's position as a key player in the global supply chain for electronics.

According to recent reports, Malaysia's semiconductor sector is expected to grow steadily, driven by increasing demands for electronic components in various applications such as consumer electronics, automotive technology, and industrial automation. Government initiatives and incentives to promote research and development are further propelling the growth of this sector, attracting both local and foreign investments.

In addition to semiconductors, Malaysia's Scientific Solutions sector is equally promising. The rise in research and innovation, supported by academia and government institutions, is fostering a conducive environment for laboratory services and related industries. This growth is fueled by demands for precision testing, quality control, and compliance with international standards.

Furthermore, the COVID-19 pandemic highlighted the importance of robust scientific solutions as businesses and institutions seek to ensure operational safety and efficiency. As a result, there is a growing reliance on calibration and testing services, which positions companies like CLMO at the forefront of these trends within the Malaysian market.

The Rationale Behind the Deal

The acquisition of CLMO by DKSH represents a strategic move to enhance its foothold in the rapidly evolving technology solutions landscape in Asia Pacific. By integrating CLMO’s extensive service offerings and established client relationships, DKSH aims to bolster both its Semiconductor & Electronics and Scientific Solutions business lines.

This deal aligns with DKSH’s broader strategy of expansion and diversification within high-demand sectors, leveraging CLMO’s expertise to offer more value and improved services to its clientele. The merger is expected to streamline operations, augment service capabilities, and ultimately drive revenue growth.

Information About the Investor

DKSH, headquartered in Zurich, Switzerland, is a leading Market Expansion Services provider, specializing in enabling companies to grow their business in Asia. With over 150 years of experience, DKSH operates in various sectors including Consumer Goods, Healthcare, and Technology, with a strong commitment to delivering tailored solutions spanning distribution, marketing, and business development.

The acquisition of CLMO exemplifies DKSH’s proactive approach towards enhancing its service offerings, particularly in technology-driven sectors. With a solid reputation and extensive networks throughout the Asia Pacific region, DKSH is well-positioned to harness the growth potential of both CLMO and the wider market.

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This acquisition seems to be a strategically sound investment for DKSH. The integration of CLMO’s specialized services in calibration and testing aligns well with DKSH’s objectives to expand its technological capabilities in Southeast Asia. Given the stable growth projections for the semiconductor and scientific solutions industries in Malaysia, this investment is likely to yield long-term benefits for DKSH by enhancing revenue streams and improving service delivery.

Moreover, the established relationships that CLMO has with prominent clients can provide immediate access to increased business opportunities for DKSH. The combination of complementary product portfolios and technical expertise from both organizations can create a more robust offering in the marketplace.

However, careful management of the integration process will be crucial. Ensuring that the strengths and cultures of both companies align will be essential in realizing the full potential of this acquisition. With effective integration, DKSH could enjoy a competitive edge in a market that is both vibrant and growing.

In summary, this deal presents a strong opportunity for DKSH to solidify its position as a key technology solutions provider in Asia, while also supporting the continued development of the Malaysian market. Overall, the acquisition seems to have promising prospects given the strategic fit and market conditions.

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