CDIB Capital Group Jintex Buyout Transaction Accoladed as “Most Innovative M&A Deal” in Taiwan, launching a new chapter for local SMEs seeking transformation

Dec 26, 2019
Press Release

 

The landmark acquisition of Jintex Corporation Ltd. (Jintex) by CDIB Capital Group (CDIB), the private equity subsidiary of China Development Financial (CDF; TWSE: 2883), was recognized as the 2019 “Most Innovative M&A Deal” by Taiwan Mergers & Acquisitions and Private Equity Council (MAPECT). CDIB brought to fruition the first take-private control deal in Taiwan aimed to facilitate the SMEs (small and medium enterprises) transformation and succession process, on the back of its profound industry insight, robust investment platform and top professional talent.

On accepting the award, Lionel de Saint-Exupéry, Director and Co-CEO of CDIB, lauded his team for the efforts in structuring and executing the deal by working alongside Jintex. Commenting on the phenomenal leveraged buyout (LBO) in Taiwan’s private equity market, he added that Jintex will become more flexible for development in the wake of privatization and attain new heights in the coming years. He believes the deal will set a good example for SMEs in Taiwan seeking business transformation and succession.

William Ho, President of CDIB and a 25-year veteran in private equity and cross-border buyout, noted that the foundation for Taiwan’s economy is SMEs, and that first-generation entrepreneurs are now facing four big challenges of business succession, talent acquisition, market development and process automation. He placed a premium on corporate governance as the culture of ownership mixed with management prevalent among Taiwanese family businesses oftentimes deter professional managers from joining them.

Mr.Ho also noted intensifying  competition from China, which makes hefty investment in R&D and automated equipment necessary for local SMEs to stay competitive. He said that CDIB, unlike prominent multinational private equity firms that only take an interest in large-caps, will continue to focus on the SME vertical to introduce business transformation, upgrade and succession via M&A activities.

David Juang, founder of Jintex, revealed a pressing problem of ageing confronting the management team despite the company’s solid operations over the years even amid market downturns. “Externally, we sense the mounting pressure from cash-rich China that drives rivals out of the game every once in a while. That’s why we plan the leadership transition ahead of time,” explained David Juang. Sabine Juang, Vice Chairman of Jintex and the eldest daughter of the 72-year-old founder. She has been teaming up with an industry expert to manage the company. She remarked that it’s international common practice for corporate management to team up with financial institutions to secure the capital they need for the next growth cycle.

The MAPECT Taiwan M&A Awards was launched in 2011 and has since become the most iconic and reputable M&A awards in Taiwan. Criteria for the “Most Innovative M&A Deal” award include innovative financing, organizational structure and business model. Jintex was delisted from the TPEx on November 29, 2019. The buyout transaction of the former public company was widely approved by its shareholders, for CDIB acquired 81.2% of issued and outstanding common shares of Jintex in the tender offer.

 


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