|RE-IEC speculative appeal upped today. IMO The company needs a consolidation to eliminate weak competitors and increase margins for a parent company. |
TTM Technologies, Inc. to Acquire Viasystems Group, Inc.
TTM Technologies 1 hour ago GlobeNewswire
Combination Creates One of the World's Leading PCB Manufacturers Transaction Expected to be Materially Accretive in the First Year
COSTA MESA, Calif. and ST. LOUIS, Sept. 22, 2014 (GLOBE NEWSWIRE) -- TTM Technologies, Inc. ( TTMI) ("TTM") and Viasystems Group, Inc. ( VIAS) ("Viasystems") today announced the execution of a definitive agreement under which TTM will acquire all outstanding shares of Viasystems for a combined consideration of $11.33 in cash and 0.706 shares of TTM common stock, which based on the closing market price on September 19, 2014 was valued at $16.46 per Viasystems share, or approximately $368 million. The total enterprise value of the transaction, including the assumption of debt, is approximately $927 million.
The combined company will be one of the world's leading printed circuit board ("PCB") manufacturers with a strong position in the automotive, aerospace and defense, medical, industrial and instrumentation, cellular phone and networking/telecom end markets. The combined company will have approximately 30,000 employees and 28 manufacturing facilities worldwide.
"Both TTM and Viasystems have pursued successful strategies over the years, and we are excited to bring these two companies together," said Tom Edman, CEO of TTM. "This combination creates an industry leader with the ability to deliver expanded capabilities from a broad global footprint to service more customers and end markets. In one step, we will accelerate our strategy to diversify our business and also reduce the impact of seasonality inherent in the cellular phone end market. We believe that the combination will result in significant synergies created by expanded capabilities and economies of scale that will benefit the customers, employees and shareholders of both companies."
"This is a compelling strategic combination that makes for an exciting new chapter for Viasystems," said David M. Sindelar, CEO of Viasystems. "The combination of these two companies will create one of the best management teams in the industry. I believe this combination is an excellent opportunity to realize value for our shareholders and creates new opportunities for our customers and employees."
The acquisition of Viasystems is expected to provide a number of benefits to TTM:
Accelerating entry into the automotive industry, an end market that offers diversification, while expanding TTM's presence in the medical, industrial and instrumentation, and aerospace and defense segments.
Providing a global footprint that serves as a foundation for future growth by utilizing the complementary strengths of the combined company in North America and China.
Increasing TTM's customer and end market diversity, positioning the combined company for further long-term growth.
Providing a unique opportunity to achieve industry-leading financial performance, create significant value for customers and shareholders, and provide greater opportunities for employees. Terms of the Transaction and Financial Highlights
Viasystems shareholders will receive per share consideration equal to $11.33 in cash and 0.706 shares of TTM common stock for each Viasystems share.
In the twelve months ended June 30, 2014, the combined company would have generated pro forma revenues of $2.5 billion and adjusted EBITDA of $300 million. For a reconciliation of adjusted EBITDA to GAAP net income, see Appendix A to TTM's presentation filed as Exhibit 99.2 to TTM's Current Report on Form 8-K filed on September 22, 2014.
TTM has identified at least $25 million in pre-tax cost synergies which are expected to be realized within the first year. These will result from combining the sales and general and administrative functions of the two companies. TTM believes that significant additional synergies will result from other integration efforts over a longer period of time. This transaction is expected to be materially accretive to non-GAAP earnings per share in the first year.
TTM expects to utilize a new $1.3 billion senior secured credit facility to finance the cash portion of the purchase price, refinance certain debt at each company, and provide liquidity for working capital and general corporate purposes. TTM has received a fully-underwritten financing commitment from J.P. Morgan and Barclays to finance the transaction.
The transaction is subject to customary closing conditions, including regulatory approvals and approval by the shareholders of Viasystems. The transaction is expected to close in the first half of 2015. J.P. Morgan acted as financial advisor for TTM, and Stifel acted as financial advisor for Viasystems.
Investor Conference Call and Webcast
TTM and Viasystems will host a joint conference call on Monday, September 22, 2014 at 8:30 AM Eastern Time to discuss the combination.
Interested parties can listen to the conference call and view accompanying slides via webcast at www.ttmtech.com and www.viasystems.com. The call can also be accessed over the phone by dialing domestic 1-877-397-0286 or international 1-719-325-4747 (ID 1521508).
The replay of the webcast will remain accessible for one week following the live event on TTM's website at www.ttmtech.com and Viasystems' website at www.viasystems.com.
TTM Technologies, Inc. is a major global PCB manufacturer, focusing on quick-turn and technologically advanced PCBs and the backplane and sub-system assembly business. TTM stands for time-to-market, representing how TTM's time-critical, one-stop manufacturing services enable customers to shorten the time required to develop new products and bring them to market. Additional information can be found at www.ttmtech.com.
Viasystems Group, Inc. is a technology leader and a worldwide provider of complex multi-layer PCBs and electro-mechanical solutions ("E-M Solutions"). Its PCBs serve as the "electronic backbone" of almost all electronic equipment, and its E-M Solutions products and services include integration of PCBs and other components into finished or semi-finished electronic equipment, for which it also provides custom and standard metal enclosures, cabinets, racks and sub-racks, backplanes and busbars. Viasystems' approximately 14,800 employees around the world serve over 1,000 customers in the automotive, industrial and instrumentation, computer and data communications, telecommunications, and military and aerospace end markets. For additional information about Viasystems, please visit the company's website at www.viasystems.com.
Certain statements in this communication may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including but not limited to: the operations of the businesses of TTM and Viasystems separately and as a combined entity; the timing and consummation of the proposed merger; the expected benefits of the integration of the two companies; the combined company's plans, objectives, expectations and intentions; and other statements that are not historical fact. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of TTM and Viasystems regarding future events and are subject to significant risks and uncertainty. Statements regarding TTM's and Viasystems' expected performance in the future are forward-looking statements.
It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of the combined company or the price of Viasystems' or TTM's common stock. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including but not limited to: the ability of the parties to consummate the proposed merger and the satisfaction of the conditions precedent to consummation of the proposed merger, including the ability to secure regulatory approvals in a timely manner or at all; the adoption of the Merger Agreement by Viasystems' stockholders; the possibility of legal or regulatory proceedings (including related to the transaction itself); the ability of TTM to successfully integrate Viasystems' operations, product lines, technology and employees and realize synergies and additional opportunities for growth from the proposed merger in a timely manner or at all; unknown, underestimated or undisclosed commitments or liabilities; the potential impact of the announcement or consummation of the proposed transactions on the parties' relationships with third parties, which may make it more difficult to maintain business and operational relationships; the level of demand for the combined company's products, which is subject to many factors, including uncertain global economic and industry conditions, demand for electronic products and printed circuit boards, and customers' new technology and capacity requirements; TTM's and Viasystems' ability to (i) develop, deliver and support a broad range of products, expand their markets and develop new markets, (ii) timely align their cost structures with business conditions, and (iii) attract, motivate and retain key employees; and developments beyond Viasystems' or TTM's control, including but not limited to, changes in domestic or global economic conditions, competitive conditions and consumer preferences, adverse weather conditions or natural disasters, health concerns, international, political or military developments, and technological developments. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth in the Annual Report on Form 10-K of TTM Technologies, Inc. for the year ended December 30, 2013, which was filed with the Securities and Exchange Commission (the "SEC") on February 21, 2014, under the heading "Item 1A. Risk Factors" and in the Annual Report on Form 10-K of Viasystems for the year ended December 31, 2013, which was filed with the SEC on February 14, 2014, under the heading "Item 1A. Risk Factors," and in each company's other filings made with the SEC available at the SEC's website at www.sec.gov.