-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueBox Build
One trend is to add box build and final assembly to your product offering. In this issue, we explore the opportunities and risks of adding system assembly to your service portfolio.
IPC APEX EXPO 2024 Pre-show
This month’s issue devotes its pages to a comprehensive preview of the IPC APEX EXPO 2024 event. Whether your role is technical or business, if you're new-to-the-industry or seasoned veteran, you'll find value throughout this program.
Boost Your Sales
Every part of your business can be evaluated as a process, including your sales funnel. Optimizing your selling process requires a coordinated effort between marketing and sales. In this issue, industry experts in marketing and sales offer their best advice on how to boost your sales efforts.
- Articles
- Columns
Search Console
- Links
- Events
||| MENU - smt007 Magazine
Kitron Acquires BB Electronics; Expands Geographic Footprint
December 22, 2021 | KitronEstimated reading time: 3 minutes
Kitron has entered into an agreement to acquire Danish EMS company BB Electronics A/S, which has production facilities in Denmark, China and the Czech Republic. The deal is clearly earnings accretive and adds significant shareholder value.
"BB Electronics gives us a solid position in one more Nordic country and extends Kitron’s footprint in CEE and China. The acquisition also provides a pathway to establishment in India. BB Electronics has well-run and highly automated manufacturing operations serving a loyal long-term customer base. Its position within higher-complexity segments fits perfectly with Kitron's strategy," said Peter Nilsson, President and CEO of Kitron.
“We're impressed with the track record of the BB team and look forward to working together.
We expect BB Electronics to continue with very little change. BB CEO Carsten Christensen will join the Kitron Group management, maintaining current responsibilities. We expect the transaction to be immediately earnings accretive for Kitron, while also supporting our growth strategy," said Mr. Nilsson.
Founded in 1975, BB Electronics is a full-service EMS (Electronics Manufacturing Services) provider based in Horsens, Denmark. The group has revenues of about DKK 1,000 million in 2021 and about 750 employees and has over the past years grown significantly, both organically and through M&A. The customer base is concentrated within industry, telecom and medical.
"We believe the match with Kitron is excellent and provides an even stronger platform for BB Electronics, including a North American manufacturing presence, which is in strong demand from our existing customer base. We look forward to executing on our growth strategy under the Kitron umbrella," said Carsten Christensen, CEO of BB Electronics.
"The European EMS industry is highly fragmented, and we're convinced that we will be even stronger together as we leverage our individual strengths to continue both companies’ track records of profitable growth," added Mr. Nilsson.
Transaction details
- Kitron will acquire 100 percent of the shares of BB Electronics A/S from BB Electronics Holding ApS, which is owned by external investors as well as BB Electronics management for a total of DKK 600 million (approximately NOK 822 million), on a debt- and cash-free (Enterprise Value) basis.
- The acquisition includes all operations and assets of BB Electronics, inter alia in Denmark, the Czech Republic and China.
- BB Electronics is highly complementary to Kitron, adding operations in jurisdictions where Kitron currently has a limited presence.
Key strategic benefits
- The acquisition will provide Kitron with a strategic geographical expansion, establishing a presence and gateway in Denmark, an additional Nordic country. Further, Kitron will have a strengthened presence in CEE with a site in the Czech Republic, a pathway to establishment in India and increased footprint and added capacity and capabilities in China.
- The acquisition provides opportunities for synergies. Following completion, Kitron expects to increase its competence and offering within production automation and sees new opportunities for efficiency improvements.
- Existing BB Electronics customers may benefit from Kitron's US operations, providing a broader customer base for the combined group.
- Valuable management resources will add to Kitron and profitable contribution to Kitron is expected from day 1 following completion.
- In summary, the acquisition is anticipated to be clearly accretive to Kitron.
Financial details:
- BB Electronics has estimated revenues of approximately DKK 1,000 million (approximately NOK 1,370 million) in 2021. Over the same period, the company has an estimated operating profit (EBIT) of approximately DKK 66 million (approximately NOK 90 million).
- Kitron has established a term loan facility with DNB Bank ASA, has available revolving credit facilities and received binding offers for debt financing of the acquisition. Kitron expects to enter into agreements for relevant debt financing of the acquisition in due course prior to closing and may also consider equity financing in relation to funding of the acquisition. There are no financing conditions for the acquisition.
- BB Electronics had net debt of DKK 54.2 million as of 30 September 2021, and as of the same period Kitron had net debt of NOK 791 million.
- The acquisition offers an attractive opportunity to create significant value for Kitron's shareholders and is expected to deliver returns well above Kitron's cost of equity and be clearly accretive to underlying earnings.
- Through the addition of high quality, long-term earnings, the transaction further diversifies Kitron's cash flows and strengthens Kitron's ability to accelerate further growth.
The transaction is conditional upon customary closing conditions and is expected to be completed January 2022. Until then, the two companies will continue to operate as separate entities. Integration preparations will start immediately upon closing.
Suggested Items
iNEMI Names Grace O'Malley CTO
05/02/2024 | iNEMIThe Board of Directors of the International Electronics Manufacturing Initiative (iNEMI) has named Grace O'Malley Chief Technical Officer (CTO).
ZESTRON Academy Launches 2024 Advanced Packaging & Power Electronics Webinar Series
05/01/2024 | ZESTRONZESTRON, the leading global provider of high-precision cleaning products, services, and training solutions in the electronics manufacturing and semiconductor industries, proudly announces the launch of its highly anticipated webinar series on Advanced Packaging & Power Electronics, a webinar series on the latest innovations, cleaning, and corrosion challenges.
NextFlex Convenes the Hybrid Electronics Community at Binghamton University
05/01/2024 | NextFlexBinghamton University hosted the NextFlex hybrid electronics community on April 18 for a day of expert presentations, breakout sessions on technology and manufacturing topics, and networking.
HQ NextPCB of HQ Electronics Debut on the International Stage for Electronics Manufacture at IPC APEX 2024
05/01/2024 | PRNewswireHQ NextPCB of HQ Electronics, a leading Chinese-based multilayer PCB manufacturer and assembly house showcased its industrial prowess on the international stage for the first time at the IPC APEX Expo 2024.
GPV’s Q1 2024 Interim Financial Report Shows Strong Navigation in Uncertain Times
05/01/2024 | GPVDanish-based GPV recorded an expected drop in sales to DKK 2.3 billion for the first quarter of 2024. The decline also affected the operating profit, which was DKK 155 million compared to DKK 179 million in the same quarter last year, although the EBITDA margin was maintained. In general, demand has been softer in 2024, but GPV continues to invest for the long-term and expects the trend to turn in the second half of 2024.