© Kitron (illustration purpose only) Electronics Production | November 30, 2018
Kitron adds to US presence in USD 15.9 million deal
Kitron has entered into an agreement with API Technologies Corp. to acquire its EMS division in the United States. The acquisition would mark a substantial strengthening of Kitron's position in the US market.
"The transaction will significantly strengthen our position in the US market, particularly within the defence industry. Important customers have wanted us to expand our presence in the US, and we think this is a great opportunity to do so," said Peter Nilsson, CEO of Kitron. The operations of the EMS division are "highly complementary to Kitron's existing operations and are expected to provide added value to current operations, in particular in the United States", a press release states. The division's main focus is on defence, aerospace, medical/industrial, and communications/consumer. The business is located in Windber, Pennsylvania, close to Kitron's current US facility in Johnstown, Pennsylvania, with approximately 100 employees operating a total of six production lines and a facility of approximately 10'000 square meters. Total revenues in 2017 amounted to approximately USD 30 million. "We have studied this business carefully over time and see great potential for integrating the API EMS division with the Kitron group, having EMS as its core business. It has a very interesting customer base, a promising order book and a highly skilled staff. We expect the division to generate an operating profit on a stand-alone basis going forward, and see substantial potential for further profitability improvements by joining forces with Kitron and increasing utilization," Mr Nilsson said. The purchase price is USD 15.9 million in cash, equal to net asset value, which is financed through existing bank arrangements. Closing is expected to take place in the first quarter of 2019, subject to necessary governmental approvals.