Reading time ( words)
Kitron has completed the acquisition of the EMS division of API Technologies Corp., substantially strengthening its position in the US market.
The transaction is completed according to the terms set out in the stock exchange announcement on 30 November 2018, including all necessary governmental approvals. Kitron will consolidate the acquired business effective today.
"This acquisition is a step change for Kitron in the US market and comes in response to customer demand for a more substantial presence in this important market," said Cathrin Nylander, CFO and acting CEO of Kitron.
The acquired business is focused on defense, aerospace, medical/industrial, and communications/consumer, and it is well aligned with Kitron's overall strategy. It is located in Windber, Pennsylvania, close to Kitron's current US facility in Johnstown, Pennsylvania, with 115 employees operating a total of six production lines and a facility of approximately 10,000 square meters. Total revenues in 2017 amounted to approximately $30 million.
"We know the API business well, and the process from the announcement until closing has further strengthened our confidence in this transaction, which we believe is a win-win proposition: We gain critical mass in the US market and the Windber facility finds a better home in a group with EMS as its core business. We expect the unit generate an operating profit on a stand-alone basis going forward and see substantial potential for further profitability improvements when it becomes part of the Kitron group," said Hans Petter Thomassen, vice president North America.
The purchase price to be paid, after certain post-signing adjustments, is $14.8 million, subject to post-closing adjustments, if any.
Kitron expects the transaction to be earnings neutral in 2019 and earnings enhancing in 2020 and beyond.
Kitron is one of Scandinavia's leading electronics manufacturing services companies for the energy/telecoms, industry, defense/aerospace, medical devices and offshore/marine sectors. The company is located in Norway, Sweden, Lithuania, Germany, China and the United States. Kitron had revenues of about NOK 2.6 billion in 2018 and has about 1,700 employees, including the acquired API business.