Compal in Talks to Buy Targets as PCs Slump
Compal Electronics Inc. is in talks to buy companies in Silicon Valley and Taiwan as the contract manufacturer embarks on “aggressive” acquisitions to reduce its reliance on notebook computers.
U.S. targets include a provider of network download software and a developer of 3-D printing technology, Chief Executive Officer Ray Chen said in an interview. Compal is also set to buy a stake in a Taiwan-based industrial personal-computer maker by the end of this year, he said, declining to name targets.
Compal is withstanding a slump in the global PC market by shifting more contract production to tablet computers and smartphones. Chen purchased a minority stake in Avalue Technology Inc. last year as part of a strategy to boost sales of industrial computing hardware and software in health-care, sports and fitness.
“Our intention is to invest and take more aggressive M&A into the new category,” Chen said at the company’s Taipei headquarters Monday. Compal likely will become the second-largest shareholder after the founders in the U.S. targets, before possibly increasing its stake, he said.
One target makes software to speed downloads for applications that analyze large amounts of data. Another provides technology that allows products to be prototyped using 3-D printing, Chen said. The deals would be “several million” U.S. dollars each, he said without being more specific.
Compal had NT$75 billion ($2.4 billion) in cash and equivalents at the end of last year and has no plans to conduct share buybacks, Chen said.
Shares of Compal were unchanged at NT$27.05 at the close, after dropping as much as 1.7 percent earlier in Taipei trading. The benchmark Taiex index fell. The stock has climbed 22 percent this year, outperforming a 3.6 percent gain in the Taiex.