NEWARK, NY -- IEC Electronics Corp. and Creation Technologies have signed a definitive merger agreement under which Creation will acquire all outstanding shares of IEC for $15.35 per share in cash, making the deal worth approximately $174 million.

The transaction, which has been unanimously approved by both companies' boards, includes a “go-shop” period during which IEC will actively see alternative acquisition proposals, which the EMS could select over the Creation offer.

The transaction is expected to close by early October. Upon completion of the transaction, IEC will become a privately-held company and shares of IEC’s common stock will no longer be listed on any public market.

The deal represents a fully diluted equity value of about $173.8 million and an aggregate enterprise value of $242.3 million, based upon net debt of $68.6 million. Creation finance the transaction through a committed debt financing package provided by JPMorgan Chase Bank and Citizens Bank.

The “go-shop” period is 35 days subsequent to signing of the merger agreement, ending Sept. 16, 2021.

The two companies are heavily vested in the electronic manufacturing services market, IEC as a high-complexity, low-to-medium volume provider focused on the aerospace and defense, medical and industrial end-markets in the US, and the larger Creation Technologies focused on medium-volume, high-reliability customers in the same markets.

Creation and IEC combined will have more than 4,000 employees in facilities located in the US, Canada, Mexico and China, and annual revenues between $750 million and $800 million, according to CIRCUITS ASSEMBLY estimates. The merger will augment IEC’s existing production capabilities with access to Creation’s existing low-cost manufacturing facilities in Mexico, the firms said.

“IEC is excited about joining the Creation family. The transaction presents our stakeholders with immediate value while providing our customers a broader platform for continued growth,” said Jeffrey T. Schlarbaum, president and CEO of IEC, in a statement.

“A combination of IEC and Creation creates a leading medium volume, high-reliability electronics manufacturer with a customer service driven culture,” said Stephen P. DeFalco, chairman and CEO, Creation. “Furthermore, IEC and Creation’s complementary geographic footprints create a premier full-service North American supply chain for both companies’ customers.”

Under the terms of the merger agreement, Creation will commence a tender offer to acquire all of the outstanding common stock of IEC for $15.35 per share in cash. The purchase price represents a premium of approximately 47% to IEC’s closing share price on Aug. 11, 2021, the last full trading day before today’s announcement. The tender offer is subject to customary closing conditions, including the tender of at least two-thirds of the total number of IEC’s outstanding shares and the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Following the closing of the tender offer, a wholly-owned subsidiary of Creation will merge with and into IEC, with each share of IEC common stock that has not been tendered being converted into the right to receive the same $15.35 per share in cash offered in the tender offer.

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