Celestica to Advance High Growth, High-Margin Strategy with Acquisition of PCI Limited

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Celestica Inc., a leader in design, manufacturing and supply chain solutions for the world's most innovative companies, announced that it has entered into a definitive agreement to acquire PCI Limited for $306 million in cash from Platinum Equity.

Singapore-based PCI is a fully integrated design, engineering and manufacturing solutions provider with five manufacturing and design facilities across Asia. PCI is expected to generate approximately $325 million of annual revenue in 2021 with low double-digit adjusted EBITDA margins* and strong cash flows.

The addition of PCI is expected to further strengthen Celestica’s approach towards engineering-focused engagements, including full product development in the areas of telematics, human machine interface (HMI), IoT and embedded systems. The transaction is expected to add over 20 complementary, blue-chip customers to Celestica’s customer base, and lead to multiple synergies, including commercial cross-selling opportunities between both companies, the acceleration of engineering product offerings, and supply chain savings.

Rob Mionis, President and CEO of Celestica, said, “We are pleased to join forces with PCI, an engineering-led business that is aligned with our strategic objectives. This acquisition is intended to help us to further diversify our customer base and expand our ATS portfolio with high-growth programs. PCI is also expected to add strong annual revenue and cash flow generation that enhances our financial profile and outlook for 2022 and beyond. We believe that today, Celestica is as strong as it has ever been – both operationally and financially – and we are confident that PCI will help us build on our momentum and continue to generate significant value for all Celestica shareholders.”

EL Teo, CEO of PCI, said, “Celestica is an industry leader with complementary capabilities and a shared focus on engineering and innovation. We are excited to leverage Celestica’s global footprint and significant resources to rapidly expand our business while bringing our new and differentiated engineering capabilities to their already impressive engineering team. Together, we intend to push the boundaries of innovation in our industry and deliver even stronger, more comprehensive solutions to our world-class customers.”

The $306 million transaction price represents an attractive adjusted EBITDA** multiple of less than 7x (pre-anticipated synergies), and the acquisition is expected to be accretive to non-IFRS adjusted EPS* in the first year, with returns anticipated to exceed Celestica’s cost of capital by the second year, or sooner. As a result, Celestica is raising its outlook for 2022 non-IFRS adjusted EPS* growth compared to 2021 from 10% or more to 20% or more.

Celestica intends to finance the transaction with a combination of cash on hand and borrowings under its credit facility***. Upon closing, it is anticipated that Celestica’s gross debt to non-IFRS TTM adjusted EBITDA ratio*, which was 1.4x as of June 30, 2021, will increase as of such date on a pro forma basis (assuming the acquisition had closed on July 1, 2020) to approximately 1.8x.

The transaction is expected to close in mid-fourth quarter of 2021 subject to receipt of an applicable regulatory approval and satisfaction of other customary closing conditions.

Updated 2022 Outlook

With the addition of PCI, Celestica’s Advanced Technology Solutions (ATS) segment is expected to generate annual revenue in 2022 of approximately $2.8 billion, with a segment margin of approximately 5.5%.

In addition, Celestica is raising its 2022 revenue outlook from a target of $6 billion or more, to $6.3 billion or more, and its non-IFRS operating margin* outlook to 4.0% to 5.0%.

Third Quarter 2021 (Q3) Guidance

Celestica reiterates its Q3 guidance:

  • Revenue – $1.40 billion to $1.55 billion
  • Non-IFRS adjusted EPS* are expected to range from $0.30 to $0.36.
  • Non-IFRS operating margin* – 4.0%, representing the mid-point of our revenue and adjusted EPS* guidance ranges


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