TT Int'l pays $13.5m for Novena's furniture arm

By Arthur Poon
Feb 22, 2007
The Straits Times

HOME-GROWN TT International, which owns and distributes consumer electronics products under the Akira brand, has bought Novena Holdings' core furniture arm for $13.5 million.

It plans to incorporate the business into its existing consumer electronics retail stores in Singapore and Indonesia to create a one-stop Harvey Norman-type home and consumer electronics giant.

The company will issue 67.5 million new TT shares to Novena at 20 cents each to acquire the furniture business, which includes its seven brand names and registered trademarks as well as its six wholly owned units and three industrial properties.

The seven brands include Novena, Castilla Premium, Castilla, Castilla Modern, Natural Living, Modern Living and The White Collection.

Shares of TT rose 3.5 cents, or 20 per cent, to 21 cents yesterday.

Novena - which has 28 retail stores here - will also pay $3.7 million in cash to buy another 18.3 million new shares at 20 cents apiece.

Novena, whose other businesses include beauty salons and investment-holding activities, will become the second-largest shareholder in TT with a 14.1 per cent stake.

TT's founders, Mr Sng Sze Hiang and Ms Julia Tong, will remain the largest shareholders, but their combined stake will be diluted from 62.1 per cent to 53.4 per cent with the issue of the new shares.

'We find the product mix and brand positioning of Novena brands' furniture very suitable to our market portfolio - that is, emerging markets and lower to middle-higher income segments,' said Ms Tong, TT's executive director.

TT plans to replicate the business model of a one-stop consumer and electronics store in its other key markets such as Brunei, Cambodia and Vietnam in the near term.

'Adding the furniture business to our electronics business will immediately boost our economies of scale and help increase both sales and profit,' Ms Tong added.

Novena founder and chief executive officer (CEO) Toh Soon Huat said that 'being a significant shareholder in TT will give Novena an opportunity to participate in TT's future growth'.

Mr Toh will serve as a consultant to TT on the furniture business for two years.

Said Mr Sng, TT's chairman and CEO: 'The deal provides us immediate access to the local furniture retail business which allows TT to expand its retail reach in the shortest timeframe.'

TT has two retail stores in Singapore and 10 in Indonesia. It said yesterday that it plans to double the number of store in Indonesia to 20 by next year.

For the nine months ended Dec 31, TT reported a net profit of $8.1 million on revenues of $510.1 million.

TT will issue 67.5 million new shares to Novena at 20 cents each to acquire its furniture business, including its seven brand names and registered trademarks, as well as its six wholly owned units and three industrial properties.