Neways EGM approves proposed acquisition of BuS Group

The acquisition will result in a considerable strengthening of Neways’ market position in Germany, the third-largest Electronic Manufacturing Services (EMS) market in the world. The merger with BuS Group will put Neways in the top five European EMS players. BuS Group is a provider of electronic solutions for the EMS market and is active right across Germany. The company comprises two operating companies in Germany (Riesa and Erfurt) and one operating company in the Czech Republic (Decin). The company has a total workforce of 900 people, including 50 developers. BuS Group expects to book sales of around € 118 million with an EBIT margin of around 6% in 2014. In the first five months of 2014, BuS Group realised some 45% of the estimated full-year sales. Neways believes the acquisition will result in considerable synergy gains, thanks to the close strategic fit and the highly complementary customer bases, market segments and activities. Neways expects to pay around 80% of the purchase price for BuS Group in cash and around 20% in Neways shares, with a lock-up period of 18 months on the shares. The purchase price is expected to be lower than the net equity value of BuS Group. Neways plans to finance the acquisition with a mix of equity and debt. The bulk of the acquisition will be financed by increasing the existing credit facilities from € 30 million to € 50 million and the issuance of € 5 million in subordinated convertible bond loans. In addition, as previously announced Neways will make use of the facility granted by the annual general meeting of shareholders to issue new ordinary shares. The Board of Directors has been authorised to issue new shares to a maximum of 20% of the outstanding ordinary share capital. The details of the financing of the acquisition and the definitive purchase price will be determined in the coming weeks, partly on the basis of the ongoing due diligence and BuS Group’s 2014 interim results. We expect to complete the transaction in the third quarter of this year. The transaction will contribute to Neways’ earnings per share as of 1 July 2014. The two companies will continue to operate independently until the transaction is completed. The transaction is subject to the outcome of the ongoing due diligence and financing.