August 3, 2023, Laguna, Philippines — Integrated Micro-Electronics (IMI) and minority shareholders of STI Enterprises Limited (STI) have entered into an agreement to sell their respective 80% and 20% shares in STI to Rcapital, a private investment firm based in London with a portfolio of UK-based companies including precision engineering solution providers in the aerospace and defense sectors, with closing to take place after satisfaction of the condition precedent. The parties have agreed on an enterprise valuation of 7.5 million GBP.

Various geopolitical issues including Brexit, COVID-19 and supply chain issues have delayed STI’s ability to achieve the targets we set during its acquisition in 2017. Realizing these targets will require more time, additional funding, and resources that an alternative partner may be able to better provide.

This divestment initiative is in line with IMI’s ongoing strategy to sharpen its portfolio, focusing on its growth and profitability within its priority markets of mobility, connectivity, and smart energy. The rationalization of IMI’s operations will allow for tighter management focus and capital allocation as the company navigates today’s challenging macroeconomic and geopolitical environment. IMI’s core wholly-owned subsidiaries have been profitable since 2021 and reported 11.5 million USD in net income for 2022 and 2.6 million USD in the first quarter of 2023.

The preliminary indicative price discussions show a one-time loss of approximately 84 million USD, including the impairment of goodwill amounting to 55 million USD, and a ~22% reduction in IMI’s equity. Net debt to equity ratio will increase from 0.6 to 0.7, still well within the company’s target range.