TTM Technologies to sell four China manufacturing plants

The USD 550 million agreement does not include certain accounts receivable of the divested business, estimated to be USD 110 million in cash receivable to TTM. The Buyer is AKMMeadville Electronics Co., Ltd. (AKMMeadville), a Chinese consortium consisting of Meizhi Investment, Xiamen Semiconductor Investment Group, AKM Electronics Industrial Ltd. (AKM), and Anmei Ventures Equity Investment Partnership, TTM states in a press release. TTM says that the the transaction is an important step in advancing its strategy of increasing the company's focus on growth markets characterised by long product cycles; think aerospace and defense, automotive, medical, industrial, instrumentation and networking/communications. “After years of double digit growth, the cellular market has matured resulting in lower growth rates.” says Tom Edman, CEO of TTM, in the press release. “However, this market still demands substantial investment and capital commitments. In addition, the cellular market is highly seasonal and is driven by short term product cycles. The combination of these trends posed increasing challenges to our strategic direction and desired business model. We are pleased to have found a buyer that we believe is strategically committed to cellular market leadership, growing the Mobility business and supporting the customers and the approximately 7,500 employees that support this business.” Edman continues saying that following the completion of the transaction, the remaining TTM business should be less seasonal and more exposed to longer cycle markets which is a better fit to its strategic direction. The manufacturing plants in questions are located in Guangzhou and Shanghai, two plants in each city. The products produced at these plants are largely advanced technology PCBs (HDI, SLP, Rigid-flex, substrate) targeted at cellular, notebook, tablet and consumer end markets. In the twelve months ended September 30, 2019, the Mobility business unit generated revenues of USD 528 million. This transaction is, as always, subject to customary regulatory approvals for transactions in China and is expected to close in four to six months.