KUALA LUMPUR (Nov 8): JF Technology Bhd (KL:JFTECH) is acquiring stakes in Singapore-based companies for a combined value of about RM26 million, in a bid to expand its business and market reach globally.

The integrated circuit maker is buying all stakes in Singapore-based Transcend Target Companies — consisting of Transcend Technologies (S) Pte Ltd and Transcend Tech Asia Pacific Pte Ltd (TTAP) — for S$6 million (RM19.91 million), it said in a filing on Friday. TTAP also owns a 95.5% stake in Transcend Technologies Inc Philippines.

In a separate filing, JF Tech said it is also buying an 80% stake in front-end wafer testing Q3 Probe Pte Ltd from Spire Manufacturing Inc, which is incorporated in the US but based in Singapore, for US$1.36 million (RM5.96 million).

The purchase consideration for Transcend will be satisfied via the issuance of consideration shares aligned with Transcend shareholders' interests. The price, which will be determined later, is based on the five-day volume-weighted average price of JF Tech’s closing price.

“The proposed acquisition comes with a profit guarantee, which would contribute positively to JF Tech’s earnings,” it said without disclosing the amount for the profit guarantee as it will be detailed in the definitive agreement.

“By leveraging Transcend’s established track record of more than 20 years and strong reputation within the semiconductor industry in Southeast Asia, JF Tech can scale the business to the next level,” it said.

Meanwhile, for Q3 Probe, the purchase consideration will include U$1.08 million in cash as well as a three-year performance cash earnout arrangement amounting to U$272,000, contingent on meeting the profit guarantee and the seller’s compliance with legal obligations.

"Given Q3’s specialisation in front-end wafer testing, it would further strengthen JF Tech’s position in the semiconductor value chain both at the back-end (final integrated circuit testing) and the front-end. Additionally, this would enhance JF Tech’s comprehensive turnkey services to semiconductor companies worldwide," JF Tech said.

The proposed acquisition in Q3 Probe also comes with a profit guarantee, which will contribute positively to JF Tech’s earnings, it added.

Shares of JF Tech closed down two sen or 3.23% to 60 sen on Friday, valuing the group at RM551.89 million.