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Kohlberg Kravis Roberts to acquire Singapore's Unisteel for $575 million

Unisteel Technology Ltd. (UNSGF.PK), a Singapore disc drive component maker, in a recent statement said that it has agreed to be taken over by Latch Holding (Labuan) Ltd. for $575 million or about S$875 million. Latch Holding is an indirect wholly-owned subsidiary of KKR Asian Fund, L.P., which is affiliated with New York-based private equity firm Kohlberg Kravis Roberts & Co. L.P.

Under the Scheme of arrangement between both parties, all the 402.79 million issued Unisteel shares would be transferred to Latch Holding fully paid and free from all types of charges. In return, each Unisteel shareholders would receive S$1.95 in cash. Unisteel also noted that for the purpose of the takeover it has entered into an Implementation Agreement with Latch Holding on Saturday.

Unisteel further noted that the Scheme would also be extended to all new shares issued following the valid exercise of options granted under the company's Employees' Share Options Scheme prior to the date and time of the meeting of its shareholders for approving the Scheme. Unisteel said that the shareholder meeting would be convened by the High Court of Singapore, which will also have to approve the Scheme. Upon completion of the Scheme, Unisteel will become part of the Latch Holding.

The deal, which symbolizes Kohlberg Kravis' second purchase of a Singapore disc drive maker in the last year, was secured in an auction, reportedly beating out other U.S. private equity firms such as Bain Capital and Carlyle Group. Kohlberg Kravis last year bought MMI, another manufacturer of disk drives components based in Singapore for S$1 billion. The Wall Street Journal in its report stated that "the deal is the latest in a string of Singapore delisting attempts and increases Kohlberg Kravis bet on Singapore disk-component manufacturers."

Unisteel further noted that it would release its financial results for the half year ending June 30, 2008 by mid-August 2008.

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