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August 4, 2023
Press Release: IMI Sells its Stake in STI to Rcapital
August 3, 2023, Laguna, Philippines — Integrated Micro-Electronics (IMI) and minority shareholders of STI Enterprises Limited (STI) have entered into an agreement to sell their respective 80% and 20% shares in STI to Rcapital, a private investment firm based in London with a portfolio of UK-based companies including precision engineering solution providers in the aerospace and defense sectors, with closing to take place after satisfaction of the condition precedent. The parties have agreed on an enterprise valuation of 7.5 million GBP.
Various geopolitical issues including Brexit, COVID-19 and supply chain issues have delayed STI’s ability to achieve the targets we set during its acquisition in 2017. Realizing these targets will require more time, additional funding, and resources that an alternative partner may be able to better provide.
This divestment initiative is in line with IMI’s ongoing strategy to sharpen its portfolio, focusing on its growth and profitability within its priority markets of mobility, connectivity, and smart energy. The rationalization of IMI’s operations will allow for tighter management focus and capital allocation as the company navigates today’s challenging macroeconomic and geopolitical environment. IMI’s core wholly-owned subsidiaries have been profitable since 2021 and reported 11.5 million USD in net income for 2022 and 2.6 million USD in the first quarter of 2023.
The preliminary indicative price discussions show a one-time loss of approximately 84 million USD, including the impairment of goodwill amounting to 55 million USD, and a ~22% reduction in IMI’s equity. Net debt to equity ratio will increase from 0.6 to 0.7, still well within the company’s target range.
Integrated Micro-Electronics, Inc. (IMI), the manufacturing arm of AC Industrial Technology Holdings, Inc., a wholly-owned subsidiary of Ayala Corporation, is among the leading global technology and manufacturing solutions expert in the world. Based on 2022 revenues, IMI ranks among the top 25 EMS service providers in the world per Manufacturing Market Insider, and is among the top ten automotive EMS companies per New Venture Research.
IMI specializes in highly reliable and quality electronics for long product life cycle segments such as automotive, industrial electronics and more recently, the aerospace market.
From its 20 manufacturing plants across ten countries, IMI provides engineering, manufacturing, and support and fulfillment capabilities to diverse industries globally.
For more information, visit www.global-imi.com.
About Rcapital
Rcapital is a private investment business that provides turnaround and growth funding to UK businesses. Unlike a traditional private equity house, Rcapital uses its own capital to invest in businesses, so it has a vested interest in delivering long term financial and reputational results.
Rcapital invests in mid-market businesses across a variety of sectors, currently with an investment portfolio of 11 businesses in sectors ranging from content marketing services to engineering and manufacturing. Since 2004, it has successfully invested in over 75 businesses, including businesses with financial and operational challenges; those experiencing rapid growth; overleveraged businesses which require financial restructuring; and non-core carve out investments from large corporates.
Investor Contact
Brian Jalijali
Global Head of Investor Relations and Business Development Finance
IMI will always be relevant, if not on the leading edge of the next big thing.
