Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it’s reached a tentative agreement to buy a tooling factory in Shenzhen from a multinational company, which it said is needed to expand capacity.
While TK declined to identify the seller beyond saying it’s a “tooling subsidiary of a multinational company,” the address provided by TK in a Sept. 16 public filing to Hong Kong stock regulators appears to match that of a former Nypro Tool facility in Shenzhen, now part of contract manufacturing giant Jabil Inc.
TK, which has large mold making and injection molding factories in Shenzhen, said it would pay RMB 9.6 million yuan ($1.56 million) for the operation, including the equipment, lease and ability to operate it as an ongoing business.
“The Proposed Acquisition is to expand the production capacity of our mold fabrication in order to cope with our expansion,” the company told regulators.
TK listed the address of the facility as “1st and 3rd Floors of Block 7, Brightman Industrial Zone, Shawan, South Bay Street, Longgang District, Shenzhen,” which matches the address for a Shenzhen factory of Nypro Tool, on both the websites for Jabil and Nypro Tool.
Nypro Tool, which is based in Hong Kong, started in 1998 as a joint venture between U.S. injection molder Nypro Inc. and Hong Kong businessman W.Y. Tam, and was Nypro’s first mold-making facility in China.
Jabil, based in St. Petersburg, Fla., acquired Nypro’s share of the business when it bought Nypro in 2013.
TK said completing the acquisition depends on several conditions, including getting agreement from the factory landlord to transfer the lease, and either party can terminate if the deal is not finished by Dec. 31.
It’s the second tool making expansion TK has disclosed recently.
The company said Aug. 29 that it paid HK$2.55 million ($328,000) for Braunschweig, Germany-based S&B Partnership, owned by Wolfgang Böttcher.
TK said it bought the German company to expand globally and provide better after-sales services to potential customers in Europe.
“The Group identified the target market in Germany as it is considered to be a European country with the most business potential and the Target Companies are regarded as an acquisition target with strong fit to the existing business of the Group,” TK said.
S&B has “a strong history in operating distribution of tools and special machines for injection molding as well as mold fabrication,” TK said.
In its most recent earnings statement, TK said revenues rose 12 percent in the first half of the year, to HK$ 528.5 million ($68.2 million), with profits up 36 percent to HK$ 53.1 million ($6.8 million), compared to the same period in 2013.
It said revenues in its mold making unit rose 31 percent to HK$ 230.2 million ($29.7 million), with its overall business driven by increasing component sales in mobile devices, electronics, medical devices and the automotive industry.
TK said it started new business units this year specializing in ultra-large molds for the auto industry and precision molds for the electronics industry, and is looking for global partners.
“In Europe, North America and Mainland China, we actively seek other mold fabricators, who suit the scale of the Group and can generate synergies for potential acquisition to facilitate the Group’s business expansion and enlarge its global market share,” it said in the Aug. 29 earnings statement.