Cover Story
Solectron Wins All in Second Round of Nortel Divestitures
Flextronics To Acquire Bosch Plant and Build For Siemens
Divestiture Potential Still Seen As High
Market Data
Computer-Related Outsourcing Projected for North America
Communications Leads Market Mix for Large CMs
News
Sanmina To Acquire Hadco in Stock Deal
Plexus to Buy EMS Operations From Elamex
Flextronics Takes Park Strategy To Poland
The suspense is over. Top-tier CMs have been waiting to see who would prevail in the high-stakes contest for the second stage of Nortel Networks' outsourcing initiative. Now that the decision is in, some providers may be disappointed. Unlike the first round where five providers shared in the spoils, in this second phase the winner, Solectron, takes all.
Based on terms agreed to and proposed, Solectron intends to purchase seven manufacturing sites from Nortel and take over its European repair services activity. Both companies have also agreed to enter into a four-year supply agreement valued at more than $10 billion and described as the largest EMS contract yet. Under these terms, Solectron will pay about $900 million, including a premium, for the Nortel operations. That price is subject to postclosing adjustments.
The two companies have signed a definitive agreement whereby Solectron will acquire assets of four Nortel operations spread among North America and Asia. Solectron will obtain NPI (new product introduction) prototyping and manufacturing capabilities in Calgary, Canada, and Research Triangle Park, NC, as well as manufacturing operations in Monterrey, Mexico, and Istanbul, Turkey (see table below). Under terms proposed in Europe, Solectron plans to acquire NPI prototyping and manufacturing operations in Monkstown, Northern Ireland, and manufacturing and repair capabilities in Cwmcarn, Wales. In addition, Solectron has submitted an offer to acquire certain PCB assembly and telephone set assets of Matra Nortel Communications S.A.S., a French joint venture between Nortel and Aerospatiale Matra.
Solectron will supply Nortel with NPI prototyping, manufacturing and repair services for Nortel's optical, carrier, enterprise and wireless products. Manufacturing services appear to be heavy in PCB assembly as only one of the sites to be acquired engages in box build, i.e., telset assembly (table). But it's no shock that Nortel would not outsource, at least at this stage, other telecom finished products, which can be high in complexity.
When the proposed transactions close, Solectron will offer employment to all 4200 Nortel employees at the acquired sites. Of those employees, about 3400 work in North America and Asia; some 800 are based in the UK. What's more, the provider will add capacity of 61 SMT lines and about 1.2 million ft2.
In addition to the acquired locations, Solectron will be moving work from other Nortel sites into these locations as well as other Solectron sites to meet Nortel's supply-chain objectives. The bulk of this work is PCB assembly across Nortel's product families.
Transactions in North America are expected to close by the end of Q2. Subject to employee consultation, European acquisitions are slated to close by the end of Q2 or beginning of Q3. The acquisition in Turkey is expected to be done in Q3. All transactions are subject to customary conditions and regulatory approvals.
When closed, these transactions will mark the completion of what Nortel describes as the industry's largest-ever outsourcing strategy. Announced some 15 months ago, this strategy transforms Nortel from a vertically integrated company to a virtually integrated one (Jan.'99, p. 10; May '99, p. 1). In August 1999, Nortel announced the first phase of that strategy, which included divestitures to four EMS companies and a telecom services firm (Aug.'99, p. 1). Nortel originally said it expected to save $250-$300 million a year on completion of its global operations strategy. Now the company is indicating it is on target to realize annual savings at the upper end of that range.
"By complementing our internal strengths with those of electronics manufacturing services companies, we increase our agility -- both operationally and financially -- and are better able to focus our resources on new product introduction, systems and network integration, and systems testing for our customers that are building the high-performance Internet," states Chahram Bolouri, president of Nortel's Global Operations.
"This announcement is part of Solectron's core strategy to continue to expand our business units, capabilities and presence in the telecommunications industry," comments Ko Nishimura, Ph.D., Solectron's chairman, president and CEO. "We are excited to participate in the largest OEM divestiture to an EMS provider to date in the EMS industry, which brings our partnership with Nortel Networks to the next level and expands our customer portfolio as it relates to telecommunications products."
According to Solectron, this contract will triple the telecom infrastructure portion of its business. The company is careful to point out that this comparison does not include data networking or cell phones, the other two components of its communications business. "Today, the telecom infrastructure is about 9% of revenue for us. So on, say, last [fiscal] year annual basis, you're looking at ballpark $700 million worth of business. This will add incrementally $2 billion ballpark of infrastructure-related equipment to our revenue base. So that's where the tripling comes from," explains Mark Holman, Solectron's VP of corporate development, strategic marketing and planning.
Note the ballpark estimate of $2 billion rather than $2.5 billion, the annualized value of the four-year contract. Why? The reason may be that the contract also includes existing business with the former Bay Networks, now part of Nortel. That business today is in the neighborhood of $400 million a year.
How much of a premium is Solectron paying? The company won't disclose the amount. But Holman will say, "It's in the same range as some of the more recent very large deals that have happened in the industry." The two he cites are the SCI deal in Nortel's first round of divestitures and Celestica's acquisition of IBM operations (Jan., p. 7). Note that SCI paid approximately twice book value for the Nortel assets it acquired (Aug.'99, p. 2).
Holman says this deal won't change Solectron's guidance of $13 to $15 billion for fiscal 2000 revenue. "We had always envisioned that we would be doing various acquisitions, and we've obviously been working on this project for a little while," he notes. Likewise, the company is telling the street that the deal won't change EPS on a nongoodwill basis for fiscal 2000, adds Holman.
Why would Solectron want the whole package? The company can find some benefit in all of the locations. For example, the Calgary operation will give Solectron its first manufacturing plant in Canada. The Research Triangle Park location puts Solectron in a hot high-tech area. In Mexico, Solectron will obtain its second location, a site in Monterrey, which had been on the company's strategic roadmap.
Monkstown, Northern Ireland, serves as Nortel's European site for optical capabilities, a booming business that Solectron obviously wants to participate in. "For us to be partnered right there with them where they have this very important product for their future is important," says Holman. Also in the UK, the Welsh operation brings Solectron into a region of electronics activity, especially Japanese OEMs, and relatively close to Southern England, where Solectron does not have a presence. The provider plans to turn the Welsh site into a center for NPI, low-volume PCBA, and repair.
The two Matra-Nortel facilities, located 10 miles apart in Northwestern France near Brest, will allow Solectron to manage them as one location. This combination will become Solectron's third site in France. Finally, there's Turkey. While Solectron had no current plans to invest there, acquiring the site benefits Solectron in its relationship with Nortel. Solectron also believes that it may learn some things about doing business in that part of the world.
As part of the Nortel agreement, Solectron will be setting up a new operating unit comprised of the Nortel sites. This unit, which will be part of the manufacturing and operations business unit, will focus on continuity of supply and enhanced performance for Nortel, as the sites change over to the Solectron business model.
Meanwhile, Solectron has completed its acquisition of Alcatel's manufacturing assets in Aguadilla, Puerto Rico, one of two North American operations that Alcatel divested to Solectron (Jan., p. 7-8). The provider takes over manufacturing of PCB products for networking and telecom and has offered jobs to some 380 Alcatel employees. The acquired site becomes Solectron's second location in Puerto Rico. Solectron's other Alcatel acquisition, located in Longview, TX, is expected to close during Q2. At present, Alcatel has no plans for further divestitures in North America beyond what has been announced.
With Alcatel done in North America and Nortel finished with its decision making, is the telecom market beginning to dry up? Not according to Solectron's Holman. "My view is definitely that there's more ahead of us than behind us in terms of outsourcing in the telecom space. The form that the outsourcing will take -- whether it's via divestiture or via pure outsourcing -- is not clear," says Holman. He also points out that Solectron has quietly done some smaller deals with telecom companies that might not be recognized for divesting.
For Holman, landing the Nortel contract is the ultimate award. "Those Baldrige awards look good in the lobby. But the real reward is when customers vote with their sourcing decisions. And to me, they [Nortel] have voted quite heavily that they trust our capability," he remarks.
Based on a new deal with Flextronics International, Germany's Siemens has surfaced as another OEM in the telecom space with work to outsource. Siemens is taking over a GSM phone business from another European company, Bosch. Bosch, in turn, has agreed to sell its GSM manufacturing operation in Pandrup, Denmark, to Flextronics. As a result, Flextronics will become Siemens' manufacturing partner for GSM phones in a supply agreement expected to exceed $1 billion in revenue over the next three years.
The Pandrup plant measures about 20,000 m2 and employs 1300 people, whom Flextronics intends hire. The company is paying the approximate book value of the fixed assets. Subject to approval by certain authorities, the deal will become effective on May 1.
"We are happy to partner with Flextronics, who can support us to reach our growth target from 30 million mobile phones this year to 60 million next year. Flextronics' proven technological competence and ability to react with flexibility and speed to its customers' demands convinced us," states Rudi Lamprecht, president of the Information and Communication Products Group of Siemens.
"This deal further strengthens our position as the number one electronic manufacturing service (EMS) provider in Scandinavia and Europe," asserts Ronny Nilsson, president of Flextronics International, Western Europe. "The state-of-the-art manufacturing facility in Pandrup will give us the opportunity to offer very competitive manufacturing services to our customers. Also, our existing experience in telecom will match the competence and experience within Bosch/Siemens very well."
Flextronics also plans to set up a Product Introduction Center in Pandrup to serve other European customers.
Siemens' Information and Communication Products is listed with 33,000 employees and $11 billion in sales. It is one of three groups with the company's Information and Communications business segment.
Given the size and number of divestitures since the beginning of the year, is the pipeline about to run low on such deals? Based on several industry sources, the answer appears to be no.
"I've been doing this job for five years. I don't believe I've seen the amount of activity as high as it is right now in the whole time I've been in this job," says Mark Holman, Solec-tron's VP of corporate development, strategic marketing and planning.
Two news services citing other sources report Solectron is looking at deals with a revenue value of $4 to $5 billion a year. Those numbers appear to be conservative. "I think actually both numbers are on the low end of stuff I know is being considered," says Holman. "Consideration doesn't always translate into conversion. And then certainly it doesn't [always] translate into conversion for Solectron because unfortunately we still have competitors."
Among those potential divestitures are more megadeals. "There are probably five or six multibillion-dollar or billion-dollar-plus deals that are being contemplated or have been contemplated," says Holman, who includes deals he has looked at in the last year. Besides the Celestica-IBM and the Solectron-Nortel deals, "there are a number of other ones out there," he reports.
"I've heard people say, 'that must be the end of the big deals.' But there are very large entrenched companies that have still just started on the cusp of outsourcing, Europeans and Japanese predominately, but some major American companies in the communications space that still have a fair amount of in-house manufacturing," says Holman.
Japanese OEMs, in particular, represent an untapped wealth of potential outsourcing (see also Dec.'99, p. 1). Just ask Michael Marks, chairman and CEO of Flextronics. In January, he told MMI, "I think the most dramatic potential we're beginning to see is for the first time real signs that the Japanese may decide that they're going to start to go down this path. And if that's the case, all hell breaks loose because Japan is responsible for 35% of the world's electronics manufacturing."
Take NEC. The Japanese company designated two U.S. plants -- Sacramento, CA, and Hillsboro, OR -- for outsourcing. But there's more. "Sony and Hitachi are starting to come and visit guys like us and try to understand if this makes sense for them. I don't expect that to happen immediately," said Marks in January. "But if that happens, then we get way bigger. The numbers are astounding." Someone told Marks that Hitachi does $17 billion worth of PCBA, all of it internal.
But even without the Japanese, "I think you're going to see 15 or 18 deals among the top players in the next year," he said in January.
One can find higher numbers. SG Cowen Securities (Boston, MA) reports that some CMs are reviewing more than 30 potential acquisitions.
According to a new study from Frost & Sullivan (San Antonio, TX), the North American EMS market in computers and peripherals reached $16.65 billion for 1999 and will grow by 22.7% this year to $20.43 billion. While the report projects that the market will further expand to $42.45 billion by 2006, F&S forecasts successive declines in growth rates starting this year. By 2006, EMS market growth for computers and peripherals in North America will have slowed to 7.3% (see table below). At that time, EMS penetration will have increased to 68.6% of the avail-able market, up from 35.2% in 1999.
The new Frost & Sullivan report is entitled North American Electronics Manufacturing Services Provider Market for the Computer and Computer Peripheral Industry and is numbered 7272-28. Within the computer industry, this report covers smart phones, PDAs, portable PCs of various types, desktop PCs and ruggedized computers. Peripherals in the analysis consisted of various kinds of printers, set-top boxes, and fax machines of several types.
For the period 1996 to 2006, F&S has assigned a compound annual growth rate of 14% to this EMS market segment combining computers and peripherals. By comparison, other market researchers typically use a CAGR of 20% or more for the market overall, but over a shorter period.
The F&S report points out that the computer sector is further along in outsourcing than are other industries such as telecom. So the rate of outsourcing for the computer sector is less than that in other industries. Still, F&S puts a positive spin on the computer portion of this North American market by saying that organic growth for the computer industry is about 12%, with the majority of this growth realized by EMS providers. In addition, F&S reports that Compaq is expected to increase its rate of outsourcing quickly. The study estimates the computer portion of the North American EMS market at $11.84 billion in 1999 and projects the sector will reach $32.79 billion by 2006.
With respect to peripherals, F&S describes the growth of the peripheral market as robust in North America, especially in Mexico. The report notes that Mexico is on the rise as a peripheral manufacturing hub for North America. But due to weakened currencies in Asia, some manufacturing previously shifted to Mexico has now moved back to Asia, says F&S. In 1999, the EMS share of the peripheral market in North America was an estimated $4.81 billion, and the study projects that EMS business to hit $9.65 billion by 2006.
Another F&S report, North American Electronics Manufacturing Service Provider Industry for the Communications Sector, no. 7227-28, estimates the region's EMS market for communications at $11.83 billion in 1999. This figure is essentially equal to what F&S stated above for North American EMS sales to the computer sector. On the other hand, MMI finds in the article below that communications sales are larger. The difference in the two results may stem from an apples-and-oranges comparison. F&S and MMI are not using same market definitions in all cases. F&S' definitions are more restrictive, at least for the computer sector. Also, F&S sliced the EMS market by region, while MMI surveyed the largest providers in the market.
For more about Frost and Sullivan reports, go to www.frost.com.
Outsourcing may have started with computers, but communications products now contribute more outsourcing dollars among a group of Top 50 providers. Based on data from 41 of the largest EMS providers, communications accounted for 36.5% of the group's combined EMS sales last year. In contrast, computers represented 33.6% sales. Total sales for these 41 providers came to $42.63 billion, of which $15.57 billion was from communications versus $14.32 billion from computers.
During the annual MMI Top 50 survey, the newsletter asked large providers for a percentage breakdown of their 1999 sales by seven market segments: computers, peripherals, communications, consumer, industrial, medical and military/aerospace. The results appear in the accompanying table, which lists 43 CMs. Two of the companies listed did not furnish data that could be included in market share calculations.
Peripherals amounted to $5.47 billion, or 12.8% of group sales. When computers and peripherals are joined as a single category, they do command a 46.4% share, easily surpassing the other segments, as one might expect. Consumer, industrial, medical, military/aerospace and other segments such as automotive added up to a 17.1% share, or $7.27 billion. Because some companies combined categories, it was not possible to compute individual market shares for these segments.
Sanmina (San Jose, CA), a top-10 EMS provider, and Hadco (Salem, NH), a major PCB fabricator with a Top-50 EMS business, have entered into a definitive merger agreement. Sanmina will effectively acquire Hadco in a stock swap. Each outstanding share of Hadco common stock will be converted into 1.4 shares of Sanmina stock. Based on Sanmina's closing price on April 14, the deal is valued at about $1.3 billion all told.
"The merger with Hadco is a natural extension of our strategy to combine our printed circuit board expertise with our other advanced manufacturing capabilities to better serve the fast growing, high-end/low-to-medium volume electronics manufacturing markets," comments Jure Sola, Sanmina's chairman and CEO.
Sanmina lists several benefits of the merger. Adding board fabrication capacity will allow the company to meet increasing customer demand for higher layer count, higher density PCBs. Hadco's advanced circuit technology will enhance Sanmina's position in optical networking as well as its ability to meet future demands for technology solutions. Also, customer segments of the two companies are complementary, says Sanmina. And Hadco's management and sales teams will advance Sanmina's growth strategy.
To be accounted for as a pooling of interests, the merger is slated for completion in late fiscal Q3 or in fiscal Q4. Sanmina expects the deal to be accretive to its fiscal 2000 earnings excluding one-time charges. The merger is subject to several conditions, including approval by Hadco's shareholders and the expiration of the waiting period under federal antitrust law. Hadco has the right to terminate the agreement if the Sanmina stock price falls below an average of $40 taken over a specified 20-day period.
With about 1.8 million ft2, Hadco operates 10 facilities in the U.S. and one in Malaysia. Its customers include both OEMs and CMs.
Industry watchers are likely to ask if any of Hadco's CM customers will be unhappy with the acquisition of Hadco by another CM.
Plexus (Neenah, WI) has signed a definitive letter of agreement to purchase the EMS operations of Elamex (Cd. Juarez, Mexico) for a price of about $52 to $53 million, subject to certain adjustments. The acquisition will mark Plexus' initial expansion outside of the U.S. in accordance with its previously stated intentions.
These operations generated about $82 million in 1999 revenue, and the current annual run rate is between $80 and $100 million. Plexus says this run rate "provides for expansion opportunity in excess of $200 million." Plexus will be acquiring two leased facilities in Juarez, Mexico: an existing 30,000-ft2 service center and a recently built 210,000-ft2 manufacturing facility. In addition to servicing the facilities' current customers, Plexus plans to bring existing and new business to the Juarez operations.
"The acquisition of these operations in Mexico demonstrates our commitment to top-line growth while also satisfying customers' demand for a low-cost electronic manufacturing solution," states John Nussbaum, Plexus' president and COO. "It's an important first step into strategic markets outside the U.S. and is the largest in Plexus' continuing stream of strategic acquisitions."
Elamex says that by divesting itself of the EMS operations, it will be better able to become a supplier of plastics and metal stamping services to the EMS industry, which has become a major consumer of these services in both Mexico and the U.S.
The company will continue to provide shelter services in Mexico for non-EMS companies.
Flextronics International (San Jose, CA) plans to establish its sixth industrial park, which will be located in Gdansk, Poland. The first building in the new park will be a 160,000-ft2 factory, planned for completion in November. In connection with this project, Flextronics has also acquired a Swedish contract manufacturer, Qcom AB, with a presence in Poland.
Flextronics intends to combine its engineering services, manufacturing, procurement and logistics management in Western Europe with cost-competitive manufacturing in Poland. The new park will be able to leverage its proximity to the Flextronics facility in Karlskrona, Sweden, to ensure efficient and cost competitive logistical solutions. Also, Flextronics will be in a position to deploy the engineering competence in Karlskrona and other Western European operations for the Gdansk park.
Under agreement with local officials of the Special Economic Zone Zarnowiec-Tczew, Flextronics will purchase 100 acres south of Gdansk.
Established in Poland seven years ago, Qcom has provided manufacturing services to the Scandinavian market. According to Flextronics, Qcom's presence in Poland and its management experience there will enable Flextronics to immediately offer contract manufacturing in Poland to existing and new customers. Flextronics has offered jobs to all Qcom employees, including 12 people in Sweden and about 70 in Poland.
Flextronics' deals done...Mean-while, Flextronics has completed its acquisition of The Dii Group (Niwot, CO). This acquisition is designed to expand Flextronics' PCB operations, design services and footprint (Nov.'99, p. 1; Dec.'99, p. 4). Flextronics has also closed its acquisition of Palo Alto Products International (Feb., p. 9). The tooling and enclosure component of this business will be renamed Flextronics Enclosures, while the industrial, electrical and mechanical engineering portion will operate as Flextronics Design.
Kimball Electronics Group (Jasper, IN) has opened a facility in the export zone of Laem Chabang, Thailand. This is Kimball Electronics' first plant in Asia. Located on the country's eastern seaboard, the new facility will be fully automated and offer board-level assembly as well as box build. The operation is expected to employ 300 to 400 people.
"This strategic move strengthens our supply chain, while expanding our global footprint," states Don Charron, president of Kimball Electronics Group.
"The initial customer has already been identified, and discussions are in progress with other existing customers. Our customers have global requirements, and we are committed to serving their needs," he notes.
Another new facility...Jabil Circuit (St. Petersburg, FL) has announced a $40-million expansion program in Auburn Hills, MI. Scheduled for completion in early 2001, the project will join an existing 125,000-ft2 facility with a new 200,000-ft2 plant, creating a 325,000-ft2 campus for manufacturing and product development. Jabil is expanding capacity for automotive and other high-tech customers in the Midwest. The company will receive tax breaks from the state of Michigan and the city of Auburn Hills.
Two more companies are preparing to enter the public side of the EMS industry. Saturn Electronics & Engineering (Auburn Hills, MI) has filed for an initial public offering, while SMTC Corp. (Toronto, Canada) has proposed concurrent stock offerings in the U.S. and Canada.
SMTC has filed for an aggregate offering of up to $125 million. It will use the net proceeds, estimated at about $113.6 million, to reduce debt under its senior credit facility.
The company resulted from the July 1999 combination of HTM Holdings, which operated Hi-Tech Manufacturing of Thornton, CO, and SMTC, which owned SMT Centre of Toronto (July '99, p. 2). Including results of the two merged companies and a 1999 acquisition for the full year, the combined SMTC's pro forma sales totaled $449.7 million last year. If the offering's proceeds had been available for 1999, pro forma earnings before an extraordinary loss would been $3.0 million. Adjusting for interest income and certain nonrecurring charges, pro forma earnings then would have been $5.4 million. When these adjustments are not made and the offering is not considered, the result would have been a pro forma net loss of $2.6 million before the extraordinary loss.
In 1999, SMTC's largest customer was Dell, which represented 35% of pro forma revenue. The provider manufacturers servers and riser cards for Dell, which intends to give more server business to SMTC, but also plans to stop using SMTC for riser cards. The next five largest customers together accounted for 29% sales. Besides Dell, other customers include names such as ATI, EMC, IBM and Lucent. STMC also does business with emerging companies in networking and communications. These emerging players include Carrier Access, Cobalt Networks, Netopia and Sycamore Networks. Networking and communications made up 57.4% of pro forma revenue.
SMTC operates one plant in Canada, six in the U.S., one in Mexico and one in Ireland. The company is targeting Asia as an area for future expansion.
The Canadian predecessor of SMTC was founded by brothers Paul and Gary Walker and a partner, Derek D'Andrade. All three remain with SMTC, and Paul Walker serves as its president and CEO.
Meanwhile, Saturn Electronics & Engineering has also filed for an IPO with a proposed maximum offering price of $125 million. Some of this stock will be offered by selling shareholders. The company intends to use its proceeds to pay down debt under its credit facility and for working capital and other general purposes.
For 1999, Saturn earned net income of $9.9 million on revenue of $257.1 million. In August 1999, Saturn acquired Smartflex Systems, an EMS provider with a flex circuit specialty, and Saturn's revenue includes Smartflex after Aug. 26 (July '99, p. 2). Counting Smartflex for a full year, pro forma sales would be $325.6 million with a pro forma net loss of $2.5 million.
The filing shows that Saturn is not a pure EMS provider, as electromechanical and electrical segments accounted for 54% and 14% respectively of 1999 revenue. While electronics contributed 32%, Saturn expects electronics to represent a significantly higher portion of revenue with the full effect of Smartflex. Also, some facilities in Saturn's electronics segment have excess capacity, for which new programs are being sought.
About 74% of 1999 revenue came from the automotive industry. DaimlerChrysler contributed 31% of sales, and Ford accounted for 19%. Exemplar and GM are also automotive customers. In computers, customers include HP, IBM, Iomega and Iris Graphics. Communications customers are listed as FVC.com, Sierracom, True Position and Motorola. In fact, Saturn recently became a preferred EMS provider to Motorola's Integrated Electronics System Sector. This relationship is set up as an equity incentive program, giving Motorola a warrant to purchase stock in Saturn. On the military side, the provider counts General Dynamics and Hughes as customers.
Saturn believes it is the largest minority business enterprise in the EMS industry. The company says this minority business status generally gives it a significant competitive advantage.
The provider was founded in 1985 by Wallace Tsuha, its chairman, CEO and president. Tsuha and his family will continue to have substantial control over the company after this offering.
Saturn operates 12 manufacturing facilities in the U.S., Mexico and the Philippines.
These IPOs become the second and third EMS company offerings announced this year. Manufacturers' Services Ltd. (Concord, MA) was first (Feb., p. 7). MSL says its IPO is still on track.
Other financial news...EFTC (Denver, CO) has entered into a recapitalization, whereby Thayer Equity Investors IV, L.P. and BLUM Capital Partners, L.P. will invest a total of $54 million in senior subordinated exchangeable notes and warrants and then undertake a tender offer of up to 8.25 million but not less than 500,000 shares of EFTC common stock at $4.00 per share. If 8.25 million shares are tendered, then the Thayer-BLUM group will own approximately 80% of the company.
M&A count up to 97...Two EMS deals that should have been added to our 1999 M&A summary bring last year's M&A total to 97 (Feb., p. 2-4).
In the first deal, National Manufacturing Technologies (Carlsbad, CA) acquired assets and certain customers of EspejoMex, a maquiladora operation providing shelter, PCB assembly and other services in Mexico. This acquisition allowed NMT to establish a Mexican operation in Tijuana in September 1999.
The second deal took place in July 1999 when Century Electronics Manufacturing (Marlborough, MA) acquired Amitek Corp., a CM in Boca Raton, FL (Aug.'99, p. 8).
