Taiwan’s WT Microelectronics Co. struck a $3.8 billion deal to acquire Future Electronics Inc., a closely held distributor of electronic components whose founder left his executive role after being accused of sexual misconduct.
(Bloomberg) — Taiwan’s WT Microelectronics Co. struck a $3.8 billion deal to acquire Future Electronics Inc., a closely held distributor of electronic components whose founder left his executive role after being accused of sexual misconduct.
Future’s fate has been in question since an investigation published earlier this year by Radio-Canada and Canadian Broadcasting Corp. that accused its octogenarian founder and controlling shareholder, Robert G. Miller, of soliciting minors for sex.
In February, Miller stepped down as chief executive officer of Future, which is based in a suburb of Montreal. He has denied the allegations. “Mr. Miller refuted them as soon as they were released,” his lawyer, Karim Renno, said in an emailed statement to Bloomberg.
“To be frank, with the recent news in the media, the decision was made to sell the company,” Jamie Singerman, corporate vice president at Future, said in a phone interview. “Retaining our business model, which is unique, and securing the job and livelihood for the 5,200 employees and families that we support worldwide were of paramount importance.”
“This is transformational for WT Microelectronics and Future Electronics, and important for the electronic component ecosystem,” WT CEO Eric Cheng said in a news release. The firm, located in Taipei, is a distributor of semiconductor components.
Shares of WT Microelectronics rose as much as 10% on Friday, the most since Nov. 2019. That took its year-to-date advance to more than 30%. ASMedia Technology Inc., which holds a major stake in the company, jumped by a similar magnitude.
“We have a ballpark estimate suggesting ~240% and ~70% increases for ASMedia’s non-op and net income, respectively, following WTM’s acquisition of Future Electronics in 2024,” JPMorgan Chase & Co. analysts William Yang and Megan Hsueh wrote in a note, maintaining their overweight rating on ASMedia.
Separately, Capital Securities Corp. raised their rating on shares of WT Microelectronics to strong buy from neutral.
Future posted revenue of $2.9 billion in the first half of 2023, according to the statement, while WT, which trades on the Taiwan Stock Exchange, generated $7.8 billion.
“We’re a global organization, and our business models are very different,” said Singerman, adding that Future’s name will remain on the business. “That’s why we believe that the companies will be complementary.” He declined to say whether the allegations against Miller had an impact on the enterprise value of the firm during the sale process.
A class action has been filed against Miller by his alleged victims, and he also faces two multimillion-dollar lawsuits, according to Radio-Canada, the French service of the Canada’s public broadcaster.
–With assistance from Abhishek Vishnoi, Cindy Wang and Jiyeun Lee.
(Adds ASMedia’s stock move and JPMorgan’s comments from the sixth paragraph.)
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