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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (1068)3/14/2008 12:49:37 AM
From: richardred  Respond to of 6850
CTS to Buy Orion Manufacturing for $10M
Thursday March 13, 6:29 pm ET
CTS Will Acquire Orion Manufacturing for About $10 Million in Cash

ELKHART, Ind. (AP) -- CTS Corp., which makes electronic components, on Thursday said it agreed to acquire Orion Manufacturing Inc. for about $10 million in cash.

Under terms of the deal, privately held Orion, a contract electronics manufacturer, could also receive up to $1.75 million in cash if it achieves financial targets in 2008 and 2009.

CTS expects the acquisition to help earnings after one year.

CTS said Orion will be combined with its electronics manufacturing business, based in Moorpark, Calif.

To: richardred who wrote (1068)7/22/2009 12:25:43 AM
From: richardred  Respond to of 6850
Four Reasons to Buy CTS Corp
CTS Corp (CTS) is a global manufacturer of electronic components and sensors and a supplier of electronics manufacturing services. CTS operates manufacturing facilities located throughout North America, Asia and Europe, and serves major markets globally. We believe that this share offers investors an extraordinary long term opportunity based on the company's record of sustained organic growth, in addition to being an attractive takeover target. We recommend building positions in the share for the following reasons:

1) The shares are attractively priced, still over 50% below their price one year ago. After many years of steady earnings growth, CTS stumbled badly in the second half of 2008 as the global financial crisis had manufacturers rushing to cancel or postpone orders at a frantic pace. Confronting this severe slowdown, CST management reacted quickly with cost cutting measures, reducing headcount by 22% and discretionary spending by 60%, while preserving a very well run R&D program which is a proven incubator of new products. As a result of these actions, the company has rapidly returned to profitability with earnings per share projected to recover strongly in the coming years. Additionally, CTS has maintained its dividend of 12 cents per share, which demonstrates management´s confidence in the firm´s continuing profitability in the coming quarters.

2) There is substantial and sustained insider buying of CTS shares on the open market, with no insider selling at all. This is a very significant indicator of management´s perception of the potential appreciation of the shares in the coming years.

3) CTS is a "Platform Company", as described by the consulting firm Gavekal. These are companies with a global network of suppliers, manufacturing facilities and customers, allowing management great flexibility in securing the lowest cost inputs at all times. Only design and marketing are conducted at the corporate headquarters in Elkhart, IN. Over 70% of the 4500 CTS employees are outside the US. This is truly a global company with an enviable position in the fast growing emerging markets. Manufacturing will always be an essential component of the global economy, and CTS is focused on the highest value added areas within manufacturing.

4) Finally, at current prices CTS has a market capitalization of less than $250 million, though this company boasts a global portfolio Blue Chip companies among its customers, including dozens of the world's leading manufacturing companies. No single customer accounts for more than 10% of sales, and American car manufacturers account for less than 5% of sales. In our opinion, the current share price does not reflect the tremendous intangible value of these long term relationships which CTS has built with hundreds of suppliers and customers during decades since first going public in 1962, as well as their very successful R&D program. Even in the midst of the global economic crisis, CTS has continued to win important new contracts and increase its market penetration in many key business segments. In short, we believe that this firm is an attractive takeover candidate, particularly for a Asian company conglomerate looking for an American manufacturing base within NAFTA.

CTS is expected to release 2nd quarter 2009 earnings on July 27th. Though 83% owned by institutions, the firm is only followed by a single analyst. Potential investors should review the excellent investor presentation available at the CTS website, as well as a very useful article on this company by Tom Armistead in Seeking Alpha on Nov 30th, 2008.

Disclosure: The author holds a long position in CTS common shares.

To: richardred who wrote (1068)1/13/2012 10:29:04 AM
From: richardred  Read Replies (2) | Respond to of 6850
Magna Steps Up Acquisition Hunt


Canadian auto parts maker Magna International Inc., flush with cash and with the support of its customers, is intensifying its global search for acquisition targets this year.

The company aims to scoop up smaller parts-suppliers in China and Europe if a slowdown in that region finally triggers a consolidation in the auto industry.

Chief Executive Don Walker said the number of calls from its automotive customers to consider potential targets is growing. Auto makers are spooked over the financial weakness of some companies that provide parts or technology, he said.

"The acquisitions are 100% our decision but I would say about 50% of this companies we consider are suggested by our auto maker customers," Mr. Walker said on the sidelines of the North American International Auto Show in Detroit on Thursday.

Magna, which made about 10 acquisitions around the world last year, is sitting on about $1.2 billion cash and feeling the heat from investors who want that cash to be put to use.

The company, meanwhile, needs to continue developing more cutting edge products to fuel its growth. Mr. Walker said he would only use the cash to buy suppliers and has no interest in buying a car maker.

Three years ago Magna was a member of a consortium that had German government backing for a deal to buy General Motors Co.'s European Opel auto unit; GM decided not to pursue the deal, concluding Opel was key to maintaining a global business.

The potential purchase stirred auto makers' ire with some saying they would move their proprietary business away from Magna if it became a competitor. In addition to supplying parts to auto makers, its Magna Steyr unit in Austria has assembled cars for PSA Peugeot Citroën, BMW AG and others.

"We will not become a competitor to our customers," Mr. Walker said.

Separately, Mr. Walker said he continues mulling a plan to build another Magna Steyr-like assembly plant somewhere else in the world.

Magna for years has talked about building another assembly plant but Mr. Walker said such a move appears more promising as auto makers continue talking about building and selling more lower volume niche cars.

To: richardred who wrote (1068)7/10/2013 10:36:49 AM
From: richardred  Respond to of 6850
Sold weighted CTS position today for portly LT profit.