3i and EDBI complete $20.5m MBO and growth capital investment in MBE Technology
Singapore-based business is one of the leading independent global suppliers of Molecular Beam Epitaxy grown epiwafers
Singapore. 3i, the leading international venture capital firm and EDB Investments (EDBI) through its subsidiary PLE Investments (PLEI), today announced that they had completed the management buyout of MBE Technology (MBE). Total funding for the buyout, which also included the investment of growth capital amounted to S$20.5m. The deal, which sees 3i, EDBI and the company s management team taking a combined majority stake in MBE, recognises the company s long term potential as well as its highly experienced and capable management team.
Founded in 1993 and headquartered in Singapore, MBE manufactures compound epitaxy wafers (commonly GaAs wafers) for use in the very high-speed electronic components used in the wireless and optical telecommunications sectors and is one of the leading independent global players in this fast-growing semiconductor segment. The company has developed specialised process knowledge and manufacturing capability which involves growing thin layers of high quality esoteric materials on basic compound substrate. This allows it to manufacture epi-wafers that are tailored to the specific requirements of customers.
According to industry sources the market is predicted to grow at a 24% CAGR by 2004, driven by increased demand for end applications - despite the current semiconductor industry downturn. The trend to outsourcing is likely to amplify these growth prospects, as device manufacturers continue to strive for faster time to market, increased flexibility and better asset utilisation.
"As a leader in the European buyout market, 3i was able to leverage its significant experience in both MBOs and in global technology investment to bring added value to this transaction," noted Teo Seng Ban, Director, 3i. "The quality of MBE s management team and their ability to build the business and attract top international talent was a key factor in our decision to invest in the company. With such a strong team and with shareholders sharing common aspirations, MBE is well positioned to leverage its niche position in a growing market segment."
Teo added, "As a value add investor, 3i aims to bring far more than just capital to the table. We are pleased to have already been able to leverage our international network to introduce management to two potential non-executive board members who may join the company in the near future, bringing additional strengths to the already capable board and management team."
Echoing similar confidence in the MBE team, Liow Voon Kheong, General Manager EDBI added, "As ASEAN s only independent molecular beam epitaxy foundry, MBE is well positioned to capitalise on the expanding market of compound semiconductor applications. We are confident that with its strong business fundamentals, excellent customer service, sound technology base and R&D capability in Singapore, MBE will become a major international player."
MBE s current focus is on the growing wireless applications market. GaAs wafers offer high speed, low noise and low power consumption properties particularly relevant in wireless products. The company s technology roadmap includes products and solutions for both optical and wireless communication applications.
"As we continue to build an international business, the partnership and support offered by 3i and EDBI as shareholders adds significant strength to our business," commented LG Yeap, MBE s founder and chief executive officer. "In particular, 3i s efforts to bring about this deal and the combined ability of 3i and EDBI to connect us within their global network of technology contacts adds significant value in addition to their role as a shareholders."
Yeap further added, "MBE is consistently ranked ahead of the competition in terms of quality, on-time delivery and price competitiveness. We have a nimble and effective team and a strong competitive advantage over our competitors - particularly our proprietary production techniques which increase yield, enhance quality and optimise equipment utilisation. We firmly believe in the potential of the sector and have great ambitions for the business."
The additional funding will enable MBE to further invest in developing its R&D capabilities and to enhance its already established technology partnership role with customers. The company already has a diversified customer base and a strong technical and business team.
According to estimates by Singapore s Economic Development Board (EDB) the compound semiconductor industry in Singapore is likely to see more than S$2 billion worth of output this year. "This is an emerging industry that the EDB is developing aggressively to complement Singapore s integrated semiconductor sector. As part of this strategic industry, MBE will contribute significantly in this growing industry in Singapore", commented an EDB spokesperson."
Noted Jane Crawford, Managing Director, 3i Asia Pacific. "As a leader in international venture capital, 3i invests across sectors, stages of business and geographies. Our primary criteria is backing growth businesses with strong long term prospects and capable and ambitious management teams. MBE is a fine example of the type of business 3i is looking to invest in."
She added, "This investment reflects 3i s continued investment appetite and our ability to invest in companies with long term potential - regardless of sector cycles and the current economic environment. We are seeing increasing interest in management buyouts as well as a growing number of later stage technology deals across the region, and expect this trend to continue as public equity markets continue to remain difficult, particularly for technology stocks."
About 3i
Founded in 1945, 3i is a leading international venture capital company, bringing capital, knowledge and connections to the creation and development of businesses around the world. 3i invests in a wide range of opportunities from start-ups to buy-outs and buy-ins, focusing on businesses with high growth potential and strong management. Listed on the London Stock Exchange, 3i has a portfolio of over 2,500 investments in a wide range of industries and invests across three continents through local investment teams in Europe, Asia Pacific and the USA. For further information, visit 3i s website at www.3i.com
About EDB Investments
EDBI is the investment arm of the Singapore Economic Development Board (EDB). It makes strategic investments worldwide focusing on new business-models, technology and knowledge intensive projects that deliver innovative solutions in hardware, software and related services. EDBI manages in excess of US$3 billion and has made investments in over 260 projects. EDBI s subsidiary, PLE Investments (PLEI), was launched in early 1999 with a fund size of S$100 million. PLEI focuses on equity investment in Promising Local Enterprises (PLEs). The aim is to support their expansion activities in new products and new markets and improve their long-term competitive positioning. For further information, visit EDBI s website at www.edbi.com
About MBE Technology
MBE Technology Pte Ltd. was incorporated in Singapore in 1993 with the sole mission to be a world class economical supplier of epitaxial wafers to the world community. MBE is the first industrial company in the field of Molecular Beam Epitaxy (MBE) in Singapore and has a strong client base spread throughout the world, and including Triquint Semiconductor, Anadigics Inc, Alpha Industries in the United States and Win Semiconductors Corp in Taiwan.
MBE s strengths lie in its dedication to total quality of products and customer service, and its ability to work as solution partners with its clients in delivering customised device materials for various applications, backed by state-of-the-art facilities staffed by scientists and engineers specialising in this field. The company takes pride in manufacturing products of optimal material characteristics and quality consistency that allow its customers to derive superior component performance. For further information, visit MBE s website at www.mbetech.com.
Technical information
MBE offers heterostructure wafers on GaAs and InP for a wide variety of device structures such as MESFET, PHEMT, HBT, lasers and photodetectors on 6", 4", 3" and 2" wafer sizes. MBE is equipped with multi-wafer MBE solid-state source epitaxy systems. These production MBE machines have long uptime, very low background, high efficiency pulse doping capacity, large volume effusion cells for extremely low defect densities and run-to-run flux stability, cluster tool based automatic platen transfer capacity and related full automation for throughput. MBE s wafers have surpassed the industry standard uniformity in terms of thickness, alloy composition and doping across the entire wafer as well as exceptionally high wafer-to-wafer reproductivity. MBE also has an entire range of quality control and characterisation tools that include Surfscan 4500, Tencor M-gage 300, PN 4300 CV profiler and Photovoltage Spectroscopy, Bio-rad HL5500 Hall System, Bede D3 High Resolution X-Ray diffraction system. This well-calibrated equipment ensures the stringent in-line process control as well as product quality assurance.
For further information, please contact:
· 3i - Hamish Bell. Tel +65 438 3131, Mob +65 9839 0284, hamish_bell@3i.com
· EDBI - Janet Lau. Tel +65 832 6012, janetlau@edb.gov.sg
· MBE - LG Yeap / BH Foo - Tel +65 773 5211
· Burson Marsteller (on behalf of 3i) - Belina Tan, Tel +65 3366 266, Belina_tan@sg.bm.com
· 3i - Hamish Bell. Tel
+65 438 3131, Mob +65 9839 0284, hamish_bell@3i.com
· EDBI - Janet Lau. Tel +65 832 6012, janetlau@edb.gov.sg
· MBE - LG Yeap / BH Foo - Tel +65 773 5211
· Burson Marsteller (on behalf of 3i) - Belina Tan, Tel +65 3366 266, Belina_tan@sg.bm.com
E-mail: Belina_tan@sg.bm.com
Web site: http://www.mbetech.com
