UMS Holdings

[Boon]

A piece of old news - Luong did sell away one of his business to AMAT back in 2006

(vested)
________________________________________________________________________________________________________________
Applied acquires parts cleaning supplier

Mark LaPedus

5/10/2006

SAN JOSE, Calif. — Continuing to expand its service offerings, Applied Materials Inc.’s Metron Technology unit on Wednesday (May 10) acquired UMS Solutions Pte. Ltd.’s parts cleaning and recycling business in Singapore for $9.28 million.

UMS Solutions is a subsidiary of Singapore’s Norelco UMS Holdings Ltd., a contract equipment manufacturer.

The acquisition will expand Metron's service capabilities in Southeast Asia. The acquisition of these assets from UMS Solutions will allow Metron to expand and upgrade its existing cleaning, coating, refurbishment and kitting services in Singapore.

The newly acquired Singapore business will be operated as part of Metron, a subsidiary of chip-equipment giant Applied Materials. Metron currently owns and operates parts cleaning service facilities throughout North America and in Europe, Israel, Taiwan and Singapore.

"The acquisition enhances Metron's position as the leading global service provider of critical parts cleaning, coating, refurbishment and analytical technologies to the semiconductor industry," said Werner Finsterbusch, general manager of Metron Technology, in a statement. "This strategic investment builds on our recent acquisition of ChemTrace by expanding our fab-wide service capability and enhancing Metron's ability to deliver state-of-the-art service technology to customers worldwide."

As reported last year, Applied Materials’ subsidiary Metron agreed to purchase all of the outstanding shares of privately held ChemTrace, an established provider of critical-component cleaning, for an undisclosed cash amount.

In a move to expand its service business, Applied Materials (Santa Clara, Calif.) in 2004 acquired the operating subsidiaries and businesses of Metron Technology N.V. for $85 million.

Besides service and support, Applied has also been expanding into new markets. For example, in a major move into the solar-cell and other equipment markets, Applied Materials last week announced a definitive agreement to acquire Applied Films Corp. for $464 million in cash.

http://www.eetimes.com/document.asp?doc_id=1161320

[ethys]

Thanks Boon. Very useful piece of information as always
Let's see how mr market will react on Monday. Hopefully like me it will consider that the huge volume last Thursday was already seen as a sell from a big shareholder so knowing now that it was 'only' Andy it will not be too negative...

[Boon]

Never been truly concerned about Andy's share sale. Company has done well over the past 3 years so I know his share sales isn't related to deteriorating fundamentals. The best bit was in 2008 where Andy sold shares at 16 - 20 cents and then the Company bought back shares at 10 - 11 cents. The only 'insider sale' that concerned me was AMAT sale. Sadly we won't know if they had continued to divest their stake till it breaches the 5% mark. Much of UMS earning potential (and growth) boils down to macro factors which are beyond its control. Utilization rates isn't very high and it holds on to $30 million net cash. If there any need for capex to expand its capabilities, the Company can do so without sacrificing its core 5 cent dividend paying capabilities IMO. Note that it managed to maintain its high payouts over the years despite acquiring IMT Group for $28 million and still being debt-free today. Of course, who knows the future - such is the nature of being small player in a cyclical industry - I cannot predict what may come by after 3 months. Assuming the Company pays out 6 cent dividend this year ($25.8 million payout), it works out to 8.9% yield.

(Vested)

In the past 10 years from 2005 to 2014, Andy Luong did not sell any shares in 2006, 2009, 2010 and 2011.

Interestingly, his stake in UMS was at 25% back in 2005 - and 10 years after (before selling off another 10 million shares on 05-June-2014) his stake was still at 25% - share buy back at work.

But after the latest 10 million shares sell off - his stake in UMS has fallen below 25% for the first time in 10 years.

http://umsgroup.listedcompany.com/stock_...r_type/DIR

(vested)

Apology - there were mistakes on Andy's share dealings, here is the correct one, I think:

2005 = Andy bought 1,572,000 shares
2006 = (UMS bought back 7,103,000 shares)
2007 = Andy bought 4,200,000 shares ; (UMS bought back 9,551,000 shares)
2008 = Andy bought 6,014,000 shares; Andy sold 512,000 shares; (UMS bought back 23,511,000 shares)
2009 = Nil
2010 = (UMS bought back 9,979,000 shares)
2011 = Nil
2012 = Andy sold 12,644,000 shares
2013 = Andy sold 1,879,000 shares
2014 = Andy sold 17,000,000 shares

http://umsgroup.listedcompany.com/stock_...r_type/DIR

(vested)

[Drizzt]

i think the context was driven away more from why AMAT sold. from the last post, it seems Andy bought back to support UMS when they werent doing so well and sol now that their cash flow is more stable. perplexing

[Boon]

i think the context was driven away more from why AMAT sold. from the last post, it seems Andy bought back to support UMS when they werent doing so well and sol now that their cash flow is more stable. perplexing

Andy "sold" because Andy probably thinks he is getting "old".

Andy "sold" & "sold" because Andy probably feels he is getting "old".

AMAT finally also "sold" probably seeing Andy "sold" and feeling "old".

To "sold" or not to "sold" - we have to find out if Andy is truly getting "old"

(vested)

[Tiggerbee]

I think what bugs me is why would the CEO sell a HUGE chunk of shares on EX BONUS DATE? And not why would the CEO sell shares? Why not sell shares before or after ex bonus date and why not sell a little at a time to minimize the volatility? I think when one invest, one should also consider the stock selling behaviors of the insiders and substantial shareholders and not just solely pay attention to the earnings performance.

[Tiggerbee]

A piece of old news - Luong did sell away one of his business to AMAT back in 2006

(vested)
________________________________________________________________________________________________________________
Applied acquires parts cleaning supplier

Mark LaPedus

5/10/2006

SAN JOSE, Calif. — Continuing to expand its service offerings, Applied Materials Inc.’s Metron Technology unit on Wednesday (May 10) acquired UMS Solutions Pte. Ltd.’s parts cleaning and recycling business in Singapore for $9.28 million.

UMS Solutions is a subsidiary of Singapore’s Norelco UMS Holdings Ltd., a contract equipment manufacturer.

The acquisition will expand Metron's service capabilities in Southeast Asia. The acquisition of these assets from UMS Solutions will allow Metron to expand and upgrade its existing cleaning, coating, refurbishment and kitting services in Singapore.

The newly acquired Singapore business will be operated as part of Metron, a subsidiary of chip-equipment giant Applied Materials. Metron currently owns and operates parts cleaning service facilities throughout North America and in Europe, Israel, Taiwan and Singapore.

"The acquisition enhances Metron's position as the leading global service provider of critical parts cleaning, coating, refurbishment and analytical technologies to the semiconductor industry," said Werner Finsterbusch, general manager of Metron Technology, in a statement. "This strategic investment builds on our recent acquisition of ChemTrace by expanding our fab-wide service capability and enhancing Metron's ability to deliver state-of-the-art service technology to customers worldwide."

As reported last year, Applied Materials’ subsidiary Metron agreed to purchase all of the outstanding shares of privately held ChemTrace, an established provider of critical-component cleaning, for an undisclosed cash amount.

In a move to expand its service business, Applied Materials (Santa Clara, Calif.) in 2004 acquired the operating subsidiaries and businesses of Metron Technology N.V. for $85 million.

Besides service and support, Applied has also been expanding into new markets. For example, in a major move into the solar-cell and other equipment markets, Applied Materials last week announced a definitive agreement to acquire Applied Films Corp. for $464 million in cash.

http://www.eetimes.com/document.asp?doc_id=1161320

Under James Morgan, one of AMAT's strategy was to increase it's recurring income business IN the semiconductor industry to avoid over reliance on equipment sales.

Under Mike Splinter, AMAT went big into the solar sector to diversify BEYOND the semiconductor industry.

There are different agenda behind the acquisitions over the years. But what is common is that AMAT is definitely going for "fab light" strategy like its customers in order to weather the cyclical semiconductor industry. That's one major reason it shut down its Austin's operations and a portion of it to UMS, not just because it's cheaper.

[Boon]

From divestment of IMT group to share sales in UMS by Andy and Quest World, Andy & family have indeed cashed out a lot of money from businesses that he had built up over the years.

The amount of money he (& family) had cashed out is probably more than the value of his remaining stake in UMS.

I don’t know what he has done with the large amount of cash – probably “incubating” a new business or getting ready for retirement, which he could certainly afford.

Either ways, he would have less or no time in the running of UMS.

Even without selling anymore shares in UMS, there remains a lot of money to be made by him from UMS through dividend payout.

From the perspective of hierarchy of needs, who knows where his priority lies?

There could be a stipulation from AMAT that Andy must be at helm of UMS to get the contract and for AMAT to maintain its strategic stake in UMS.

If his priority lies somewhere else - it could be an issue.

(vested).

[mslee888]

Lets see things in perspective. I think there is no big cause for alarm regarding AMAT and Andy sale. Despite Andy selling 10mill shares, he is still the single biggest shareholder. As long he is aligned with shareholder's interest and company is doing well with qtrly dividend payouts, my faith in the company is still intact.
Any changes in these factors will make me review the decision whether to continue to be vested in UMS.

Still Vested

[heifien91]

With the recent sale from the CEO and AMAT, it got me looking at the fundamentals again. The sale from AMAT bugged me more than that from the CEO, afterall, him reducing his stake over the years have become quite a common thing already and does not seem to reflect that it means a downtrend in the business. However, why is AMAT reducing its stake slightly?

Looking at the PHLX, it has peaked at an all time high of 84.16. Looking at UMS fundamentals, as of FY2013 results and current share price of 0.69, the P/E ratio stands at 8.21x, EV/EBITDA at 7.3x and FCF Yield of 8.71%. Furthermore, looking at 1Q2014, we see revenues increasing, eps increasing, balance sheet getting stronger and still without debt. Fundamentally it is still undervalued, however, the sale from AMAT is still quite worrying, and do they know something that we don't know yet?

Just seeking more views on this matter.

(vested)

SG Value Investor
http://www.sgvalueinvestor.wordpress.com