New Celestica CEO: 'M&A a Tool We're Looking to Deploy'
TORONTO -- Celestica has more than $500 million in cash on hand and could be gearing up for an acquisition, executives suggested this week.
During its quarterly earnings report on Jan. 27, the contract assembler noted its cash balance increased by $49 million sequentially to $545 million at the end of December. The firm's net cash position asof Dec. 31 was $282 million, not including $238 million on a term loan and $25 million on a revolving credit facility.
New CEO and president Rob Mionis told analysts the merger and acquisition path is a "key tool that (Celestica) looks to utilize." Any deals the company makes would be strategic in nature, he added.
"We’re going to be very purposeful and very focused on any M&A that we do to make sure it passes our stringent financial criteria and truly add shareholder value and adds capability to the company. But it is a tool in the toolbox that we’ll be looking to deploy."
Mionis did not disclose any specific markets or companies Celestica might be interested in, but said the company's strategy is to accelerate its leadership position in some of its key markets.
CFO Darren Myers added that Celestica is underleveraged financially and that given the right opportunities, it would take on additional debt. "Absolutely we’d be willing to put more debt on the balance sheet. I don't want to box us into an actual rate, but ... we have a lot of financial leverage and ability to raise to 2+ in terms of debt. It’s about finding the right opportunities that we can bring value to."
