TABY, SWEDEN – Mycronic AB has signed an agreement to acquire 75% of electronics dispensing OEM Shenzhen Axxon Automation Co. for SEK 430 million ($50.1 million) in cash.
As part of the agreement Mycronic will acquire the remaining shares of the company in two steps – an additional 5% this year and the final 20% after three years. The final purchase price will be adjusted based on parameters such as growth and earnings, which may include changes compared to the current valuation.
Mycronic will pay for the acquisition through cash on hand. It said the deal was part of its strategy to grow sustainable net sales to above SEK 2 billion ($233 million).
Shenzhen-based Axxon develops, manufactures, and sells electronics dispensing equipment and is said to have leading position in the SMT market in China. It had 2015 net sales of about SEK 150 million ($17.5 million) and has currently approximately 240 employees. Net sales doubled in 2015 and its EBIT margin exceeded 20%.
China's share of the global dispensing market is about 40%, which translates to several hundred millions of dollars.
A key strategy for Mycronic’s business area SMT is to leverage the company’s leading position in solder paste jetting technology and to further expand into the general dispensing market. The combined businesses will create one of the leading dispensing equipment companies globally.
“With the acquisition of Axxon we are taking the next step in our strategy for our SMT business. Overnight we are creating a leading dispensing business globally. Axxon’s technology is complimentary to ours. We see great value in Axxon’s market position in the important SMT market in China, but we also see value in the know-how represented by the people in Axxon,” said Lena Olving, president and CEO of Mycronic.
Axxon chairman and founder Chen Long said the company was "very pleased" to join Mycronic.
"We admire Mycronic’s advanced technology. Axxon has enjoyed rapid growth in recent years, and has become a leader in the dispensing equipment industry in China with a high-value customer base in the smart phone and other mobile devices industry. It has a market driven, talented management team and solid technical strength. I believe that under the leadership of Mycronic, Axxon will soon become a global leading brand of dispensing equipment."
Ed.: 1 SEK = $0.116507
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