OYL Industries Acquired by Daikin

OYL Industries has had a significant change in ownership. OYL Industries was acquired by Daikin, a Japanese multinational air conditioning and chemical company.

The acquisition is a strategic move for Daikin to expand its global reach and presence in the market.

Daikin is a well-established company with a long history dating back to 1924.

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OYL Industries was incorporated in Malaysia as a private limited company under the name of O.YL. Industries Sdn Bhd in 1974.

The company started its operations in Shah Alam, where it initially focused on assembling gas cookers and GLEM gas ovens.

OYL expanded regionally into China and Indonesia in the 1980s, marking a significant milestone in its growth.

In 1994, OYL took a major step towards globalization by acquiring US-based SnyderGeneral, a move that made it the first Malaysian public listed organization to do so.

OYL was a public listed company, with its shares traded on the Main Board of Bursa Malaysia, before it was delisted after becoming a member of Hong Leong Group Malaysia.

OYL was acquired by Daikin in 2006, bringing an end to its operations as an independent entity.

Here are the key dates in OYL Industries' history:

The Acquisition involves purchasing up to 100% of OYL shares.

The per share purchase price is 5.73 Ringgit Malaysia (RM) per OYL ordinary share, which is approximately 175 yen.

Daikin will purchase OYL shares from the largest shareholder, Hong Leong Secretarial Services Sdn. Bhd, and Mr. Liu Wan Min, who collectively hold approximately 45.2% of OYL's outstanding shares.

The purchase price for this combined stake is approximately 3,441 RM million, which is around 105 billion yen.

Daikin will purchase the remaining OYL shares, up to approximately 54.8%, through a Mandatory General Offer (MGO) from other public shareholders.

The price paid in the MGO will be 4,167 RM million, if all remaining OYL shareholders accept the offer.

The Acquisition is subject to approvals from the relevant Malaysian authorities and antitrust clearances in the relevant countries.

The stock purchase from the Vendors is due at the beginning of July 2006, and the settlement for the tendered shares by other OYL shareholders under the MGO is due at the end of September 2006.

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After the acquisition, OYL Industries will continue its operations as a consolidated subsidiary of Daikin.

OYL's current management will remain in charge, operating the business under its existing organizational structure for the foreseeable future.

Daikin will dispatch some executive officers to OYL to help with the integration, but overall, OYL will maintain its independence.

A joint committee between Daikin and OYL will be established to study and maximize the synergies of the acquisition.

Daikin will work to help OYL's management and employees understand its mission statement and corporate ethics, aiming to create a shared sense of value and unity.

This new joint culture will be built while respecting OYL's existing corporate culture and tradition.

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Daikin Industries, Ltd. will acquire O.Y.L. Industries Bhd, a Malaysian-based global HVAC company that owns U.S.-based chiller manufacturer McQuay International.

The acquisition will lend Daikin's extensive technologically advanced product expertise to O.Y.L.'s applied product solutions.

Daikin will purchase up to 100% of OYL shares with a per-share purchase price of 5.73 Ringgit Malaysia (approximately 175 yen).

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The acquisition is intended to involve two steps, with the purchase of OYL shares from the largest shareholder and other public shareholders through a Mandatory General Offer.

Daikin's financials, such as interest-bearing debt ratio, are expected to deteriorate temporarily due to the acquisition cost.

However, due to OYL's relatively high profitability, the short-term impact on Daikin's profitability is assumed to be limited.

Daikin expects profit expansion at a relatively early stage and a Return on Investment (ROI) of the acquisition cost at just above 10%.

The acquisition will allow Daikin a full-fledged entry into North America, the largest air-conditioning market.

O.Y.L. will continue its operations as a consolidated subsidiary of Daikin after the acquisition is complete.

A joint committee between both parties will study how best to maximize the acquisition synergies.

Daikin's consolidated revenue and profit for the current fiscal year ending March 31, 2007, are assumed to be equivalent to OYL's performance of a half year.

The acquisition is subject to approvals of the relevant Malaysian authorities and antitrust clearances in the relevant countries.

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The acquisition of OYL Industries by Daikin is a significant move that will likely have a lasting impact on the company's financials.

Daikin's financials, such as interest-bearing debt ratio, are expected to deteriorate temporarily due to the acquisition cost.

The purchase price of 5.73 RM per share implies a premium of approximately 22% to the latest one month average OYL share price as of May 12, 2006 at Bursa Malaysia.

Daikin expects the short-term impact on its profitability, such as EPS, to be limited even after considering the amortization of goodwill.

A temporary deterioration of Daikin's financials is expected due to the acquisition cost, but the company anticipates profit expansion at a relatively early stage.

The acquisition is expected to result in a Return on Investment (ROI) of just above 10% for Daikin.

Daikin's consolidated revenue and profit for the current fiscal year ending March 31, 2007, is expected to be equivalent to OYL's performance over a six-month period.