In today’s briefing:
- SATS: Integrating WFS –Key to Acquisition Success
- MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams
SATS: Integrating WFS –Key to Acquisition Success
- In September 2022, as the world began to rebound from COVID-era travel restrictions, Singapore-listed SATS Ltd. made waves with an audacious move.
- With a market cap of SGD 4.5 billion, SATS announced plans to acquire global air cargo giant Worldwide Flight Services (“WFS”) for up to €1.3 billion (S$1.9 billion), valuing the deal at an enterprise value (“EV”) of €2.25 billion (S$3.1 billion).
- The market reacted with skepticism, sending SATS’ share price plummeting by 35% as concerns over equity dilution and debt levels unsettled investors accustomed to steady dividends and strong returns.
MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams
- Even if a company goes private due to listing costs, it is good for investors to shift to a more share price-conscious management in order to maintain the listing.
- Many companies want to take over management rights with the founding family, but find it not easy to continue as a publicly traded company and consider going private.
- New problems lie ahead in the coming years between founding families who chose MBO to inherit the management control of “family business” and MBO funds who have to Exit.
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