NORDIC Group said its subsidiary Avitools Singapore will be acquiring a precision-machining and turnkey-manufacturing services company for S$10 million, as the group announced separately that it has clinched S$19 million in contracts.

In a bourse filing on the proposed acquisition of Eratech on Tuesday (May 24), the systems-integration solutions provider said Avitools Singapore has entered into a non-binding term sheet to buy the entire issued and paid-up share capital of Eratech.

The move is expected to raise the revenue of the group’s precision-engineering division, as it presents an opportunity for the group to widen its range of products and services and expand its customer base, it added.

The acquisition will be financed through internally generated funds and bank borrowings.

The S$10 million purchase consideration was worked out based on the company’s net tangible assets – about S$8.3 million as at Dec 31, 2021 – and earnings, the group noted. 

The group said the sale is subject to a condition that Eratech has cash and cash equivalents of at least S$4.3 million in the bank on the completion date.

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In a separate bourse filling, Nordic Group said the S$19 million worth of contracts that the group won were signed with new and repeat clients from Singapore, Malaysia and China. Among them are multinational companies and companies in the marine, offshore oil and gas, petrochemical, semiconductor and infrastructure industries or sectors.

The biggest set of contracts are for a S$9.1 million project to insulate, scaffold and maintain plant and equipment in an infrastructure. It did not name this facility, but said the maintenance contract spans 3 years and ends in April 2025.

Its system-integration division looks after another S$5.7 million in marine contracts, of which S$1.5 million is for the manufacture of valves and actuators, control and tank-gauging systems and upgrading of a water-ballast system. The remaining amount is for electrical and instrumentation work, which will mainly be completed in the first half of next year. 2023.

Another S$2.2 million is for machining services and mechanical assembly, to be completed in the second and third quarters of this year. 

The last S$2 million are for services of its cleanroom, air and water engineering solutions division. These projects are mainly in Malaysia and will be completed in the first quarter of next year. 2023.

Shares of Nordic Group closed flat at S$0.395 before the announcement on Tuesday.