HELSINKI – Incap has gained a foothold in the US with the acquisition of the Pennsylvania-based EMS company Pennatronics.

The enterprise value of the acquired company is $18.6 million, and the agreement also includes a potential additional earn-out of a maximum of $3 million. The transaction will be paid in cash except for the amount of approximately $1.6 million which will be paid in Incap's shares.

Pennatronics has 102 employees working out of a 6,000 sq. m. production facility near Pittsburgh, Pennsylvania, and offers complete electronics manufacturing services including PCB assembly and box-build assembly, as well as engineering and sourcing services. The company saw $30 million in revenue in its last financial year, and its EBITDA was $2.9 million.

Incap said the acquisition is in line with its growth strategy, and will establish Incap's presence in the US market and create a foothold for further expansion in the country. Pennatronics' US production facility complements Incap's current production facilities located in Estonia, India, the UK and Slovakia. The company said the acquisition will broaden Incap's customer base and will allow for US-based services to be offered to existing and new customers while Pennatronics' customers will benefit from opportunities to source services from Europe and India. In the long term, the acquisition is expected to bring cross-selling opportunities and synergy benefits in e.g., material purchasing, Incap said.

"I am very excited about widening our geographic presence and gaining foothold in the US market," said Incap CEO Otto Pukk. "I am also very happy to welcome the Pennatronics team of 102 professionals onboard. The acquisition will benefit both companies' existing customers with opportunities to source from new areas and I am convinced that, together with Pennatronics, we can create new opportunities to expand our business in line with our growth strategy."

After the acquisition, the former owners of Pennatronics, Ralph B. Andy and Keith D. James, are committed to support Incap over the transition period.

"I am enthused about the opportunity for our seasoned management team and dedicated employees to join forces with Incap," said Andy, who serves as president and CEO. "The Pennatronics team is excited to become Incap's first factory and cornerstone facility in the US to help fuel their future growth. This combination will enable us to take our business to the next level and provide our customers with enhanced capabilities and even greater value. I wish Incap North America a successful future as they expand their production footprint into the US."