SCHAUMBURG, IL -- A Sparton subsidiary has agreed to acquire Onyx EMS in a $43.25 million all-cash transaction, subject to certain post-closing adjustments.

Onyx has two manufacturing sites in Watertown, SD, including its new 130,000 sq. ft. plant, where it manufactures medical devices and industrial products, and a sales office in Minneapolis. The transaction is expected to close by Nov. 30, and will be funded through Sparton’s cash on hand and borrowings under a new bank facility currently in process. The acquisition is expected to be immediately accretive to earnings.

The move reverses a trend by Sparton to decrease its dependence on contract electronics assembly. EMS sales made up 24% of the company's overall revenue in its fiscal 2012.

Sparton said it made the deal in order to diversify its customer base. “The addition of Onyx meets the criteria of our growth strategy by providing further expansion regionally into the Minneapolis medical device corridor, diversifying our customer base through both existing programs and a strong business development pipeline, and to continue to increase the number of complex sub-assembly and full device programs within Sparton," said Cary Wood, president and CEO. "Onyx brings solid, long-term customer relationships that will utilize Sparton’s expanded list of service offerings such as our low cost country footprint in Viet Nam and full engineering design capabilities.”

To help finance the deal, BMO Harris Bank has committed $65 million in credit facilities with an increase option of up to $100 million. The credit facilities will be available for working capital, additional acquisitions and general corporate purposes.

Founded in 1989, Onyx is the former OEM Worldwide.