BT: CSC to buy 70% of Wisescan Engg for $2.7m

Business Times - 05 Jan 2008

CSC to buy 70% of Wisescan Engg for $2.7m

By CHEW XIANG

CONSTRUCTION group CSC Holdings, which specialises in foundation and geotechnical engineering, has signed a sale and purchase agreement for a 70 per cent stake in Wisescan Engineering Services for $2.65 million.

The purchase will be made through CSC's wholly owned subsidiary, Soil Investigation.

The sellers are Wisescan's managing director Chua Keng Guan and Chua Limin. Mr Chua Keng Guan will retain a 30 per cent stake and his position as managing director.

The sellers are guaranteeing a pre-tax profit of at least $800,000 a year for three years from April 1 this year. They will pay 70 per cent of the shortfall if the target is not met.

Wisescan is a surveyor specialising in solutions relating to tunnelling and automatic monitoring survey. It also has a presence in several overseas markets including Taiwan, China, India and Malaysia.

With the proposed acquisition, CSC is gearing up to handle more infrastructure and transport projects in Singapore such as the extension of mass rapid transit lines and the underground utility cable tunnel.

'With the Singapore government's recent announcements to develop and build new mass rapid transport and other infrastructure plans ... the proposed acquisition will enhance the group's synergistic competitiveness while broadening the group's presence in overseas markets,' it said in a statement.

The acquisition, which is subject to satisfactory due diligence on Wisescan, is expected to be completed within four months. It is not expected to have any material effect on the group's net tangible assets and earnings per share for the current financial year.

Last November, CSC reported net profit for the six months to Sept 30 of $19.1 million, up from $4.8 million for the previous corresponding period, as revenue surged 245 per cent to $185 million.

CSC closed yesterday at 33.5 cents, down 1.5 per cent.