JASPER, IN -- Kimball Electronics Group will acquire Reptron Electronics for $0.68 per share, or roughly $3.4 million. The deal between the two contract electronics manufacturers is expected to close during the first quarter 2007, and should push Kimball into the top 20 worldwide EMS firms as ranked by revenue.

The price is a 28% premium over Reptron's three-month volume weighted average stock price. The transaction is subject to a number of conditions including completion of a cash tender offer for Reptron's outstanding senior secured notes due 2009 at a 12.5% discount to par value and a related consent solicitation, shareholder approval and other customary conditions.

In a statement, Kimball Electronics president Don Charron said, "We have very similar cultures in terms of how we treat our people and how important we believe that is to customer service. The fact that both Kimball and Reptron have been recognized by Circuits Assembly as Service Excellence Awards winners is a strong testimony that these principles are hard at work."

"This acquisition supports Kimball's ongoing strategy to diversify from our automotive base into end-markets that also require high quality and reliability," Charron said.

In its most recent quarter, ended Sept. 30, Kimball's EMS operations reported net sales of $158.5 million, bolstered by acquisitions of Bayer Diagnostics Manufacturing Ltd.'s Bridgend, Wales, manufacturing operation and Magna Donnelly's assembly operation in Longford, Ireland. It recently brought online a plant in Nanjing, China.

In its September quarter, Reptron reported a net loss of $1.4 million on sales of $36.4 million. Last year the company did $138 million in sales but lost $14.5 million. The company is still rebounding from the electronics manufacturing downturn that pushed it into bankruptcy in 2003. That year it sold off its electronics distribution business to Jaco Electronics and its memory module division to All Components Inc. and refocused on its EMS business.

Reptron had announced Nov. 16 that private discussions were taking place about its senior secured notes.

• Prev
• Next