Hong Kong and Singapore, 4/25/18—Publicly held Techcomp, a distributor and manufacturer of scientific instrumentation, lab equipment and services in China, has announced a company reorganization and sale, pending shareholder approval. Under the proposal, Baodi International Investment would acquire a 62% stake in Techcomp’s manufacturing business with outside shareholders controlling 39%. Baodi International Investment is controlled by China’s state-owned Assets Supervision and Administration Commission of the Yunnan Provincial People’s Government. The share purchase would include the 41% stake held by Founder, Chairman and CEO Mr. Lo Yat Keung and his wife. This business would remain a publicly listed company

Techcomp’s distribution business would be separated to form a new company in which Mr. Lo and his wife would control 41% of the shares. This business would be taken private. The combined deals would represent an aggregate offer of HKD 4.107 ($0.52 = HDK 7.85 = $1) per share. This a 67.0% premium over the stock’s closing price the day prior to the announcement.

 In the financial filing disclosing the deal, Techcomp cited the proposed transaction as stemming from the low profitability of its manufacturing business. In 2017, Techcom posted sales of $199.4 million, with an operating profit of $1.5 million (see IBO 3/31/18). The distribution business represented 65% of total revenues. Baodi International Investment plans to invest in this business and would keep all employees, according to the filing.