LONDON: Swiss electronics manufacturer Cicor Technologies Ltd. has agreed to acquire British rival TT Electronics Plc in a recommended cash and share deal that values TT at approximately £287 million, the companies said on Thursday.
The acquisition will create the largest pure-play global electronics manufacturing services (EMS) provider in the high-mix, low-volume sector, which focuses on specialized, complex products rather than mass-market goods.
Under the terms of the deal, TT shareholders will receive 100 pence in cash and 0.0028 new Cicor shares for each TT share they own. Based on Cicor’s recent closing price, this values each TT share at 155 pence, a 64% premium to its price on October 29.
Following the completion of the transaction, which is expected to be implemented via a court-sanctioned scheme of arrangement, TT shareholders will own approximately 10% of the enlarged Cicor Group.
“The combination of Cicor and TT is a decisive, transformative step that accelerates delivery of our long-term strategy,” said Cicor CEO Alexander Hagemann in a statement. He said the deal creates a “platform of scale and capability” to serve as an innovation partner in high-growth sectors like aerospace, defence, and healthcare technology.
The boards of both companies are recommending the deal to their shareholders. TT Chair Warren Tucker cited the company’s “insufficient scale” and the challenges of being a smaller company in UK public markets as reasons for supporting the offer.
“Cicor has made a compelling offer which delivers accelerated value for shareholders and represents an attractive premium to recent trading levels,” Tucker said.
The combined company is projected to have revenues of over 1.2 billion Swiss francs (£1.1 billion) and sector-leading EBITDA margins. Cicor’s directors forecast at least £13 million in annual pre-tax cost synergies by the end of the third year after completion, with one-off integration costs of approximately £16.5 million.
The enlarged Cicor Group will continue to be listed on the SIX Swiss Exchange.