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Electronics Production | February 07, 2005

Jabil to acquire VEM

Jabil Circuit, Inc. announced today its intention to acquire the business and assets of Varian Electronics Manufacturing (VEM), the manufacturing business of Varian, Inc. The VEM business derives 85% of its revenues from external customers in the medical, communications, industrial and aerospace industries.
"Varian’s electronics manufacturing business specializes in high-mix, high-complexity products in the medical, aerospace, communications and scientific instrument markets. This acquisition expands our commitment and delivers on our promise to provide the market leading solution to customers in these highly specialized and rapidly growing markets,” said Timothy L. Main, President and CEO of Jabil. “Customer requirements in these markets are truly unique and this acquisition will give us greater depth and competency to serve customers and expand our business in these sectors.”

The Varian Electronics Manufacturing business has a targeted competency in high-mix and high-complexity electronics manufacturing. Operating as an independent division of Varian, Inc., VEM serves the medical, communications, industrial and aerospace industries, primarily serving the high-mix, high-complexity manufacturing markets. Three Varian sites, a 200,000 square-foot operation in Arizona and two small leased sites in California have full EMS capabilities and provide services for products including patient monitoring, digital x-ray, infusion pumps, intelligent transportation, scientific instruments, telephony, satellite modems, avionics instrumentation, flight electronics, simulators and RADAR equipment.

“We are excited to be able to offer our customers the opportunity to grow and take their business to the next level utilizing Jabil's full suite of value-add services, anywhere in the world. Jabil and Varian have the same vision and the same goal: to offer customers great services in the right locations,” said C. Wilson Rudd, Vice President, Electronics Manufacturing, Varian, Inc. “The combination with Jabil also affords long-term growth and career opportunities for VEM employees to gain global manufacturing experience.”

Completion of the transaction, which is subject to regulatory clearance and customary conditions, is expected to take place in early March. The purchase price for the acquisition is approximately $195 million, subject to certain working capital adjustments. The company said the transaction would be accretive to earnings during fiscal year 2005 and that management would provide specific guidance during the second quarter earnings announcement on March 17th.

“Varian’s competency combined with Jabil’s global footprint, procurement leverage, services, capital and long term commitment to the business will result in a powerful and satisfying solution for customers. We look forward to improving and expanding our business in this area," said Main.

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