ELK GROVE VILLAGE, IL – EMS firm SigmaTron International and pet tech company Wagz have executed a letter of intent related to a merger. Subject to terms and conditions, SigmaTron would issue approximately 2.27 million new shares of SigmaTron stock that would result in the stockholders of Wagz owning approximately one-third of the combined company.

The deal is expected to close by the end of August. It is subject to achievement of certain milestones and satisfaction of conditions by both parties prior to closing, such as finalizing a material definitive agreement and SigmaTron’s raising of additional capital that it projects will be needed for the expanded operations in the amount of at least $7.5 million.

SigmaTron and Wagz have worked together for the past two years to manufacture part of Wagz’s product portfolio. Earlier this year, Wagz was awarded a contract to design and produce a smart dog collar for a mobile carrier. At the 2020 Consumer Electronics Show, Wagz announced it was incorporating the Sprint Curiosity IoT platform and will be launching its smart dog collar in Australia later this year.

“Over the last two years, we have become immersed in the pet tech market with Wagz as our customer,” said Gary R. Fairhead, president and CEO, SigmaTron. “We have been impressed with the growth of the pet sector, and data show it is practically recession-proof. Recent reports indicate pet ownership during Covid-19 has increased, accelerating what was already a very strong market. Having worked closely with the management team at Wagz and gaining a great deal of respect for their capabilities, we felt there was a significant opportunity to partner with them and enter that market.  Wagz would benefit from our ability to provide world-class manufacturing services through our global footprint and supply chain, and SigmaTron would benefit from new high-margin recurring revenue, thereby bringing mutual value to the combination and driving stockholder value.”

“Wagz, with its recent selection by one of the largest mobile carriers to provide them the Wagz Smart Collar to sell, and on the heels of the announcement at CES with product expansion into Australia, faced significant challenges in building out sufficient inventory and developing a highly optimized supply chain,” said Terry Anderton, founder and CEO, Wagz. “We currently expect the design of the collar to be finished by the end of June. SigmaTron was a logical partner, and we are excited about the opportunities this combination brings to both companies. It also provides the opportunity for the Wagz investors to obtain a publicly traded stock for their investment in Wagz that we believe has significant upside.

“Wagz will be a standalone operation of SigmaTron. As we build our brand and product line, we believe the IoT nature of our ecosystem of pet tech products will bring significant opportunities to the combined company. We will be able to leverage SigmaTron’s size and manufacturing expertise to continue to launch revolutionary products into the pet tech market.”

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