Jabil completes the divestiture of Mobility business
EMS provider Jabil has closed the transaction to divest its Mobility business to BYD Electronic (International) Company Limited ) in a cash transaction valued at $2.2 billion.
Jabil announced the divestment and the signing of a definitive agreement for the transaction back in September 2023.
“We are pleased to successfully close this transformational deal and I am confident that this is the right step forward for Jabil,” said CEO Kenny Wilson, in a press release. “The net proceeds will enable us to enhance our shareholder-centric capital framework, including incremental share buybacks. Additionally, it will provide opportunities for further investment in key areas of our business.”
Q2 Fiscal Year 2024 Outlook
With the transaction closing earlier than initially thought, Jabil now anticipates the midpoint of its prior guidance range for net revenue for the second quarter to be lower by approximately USD 400 million. The company previously forecasted 2Q24 revenues to end up between USD 7.0 billion – USD 7.6 billion, however, in its updated outlook Jabil is looking at 2Q24 revenues of USD 6.6 billion - USD 7.2 billion.
“I am delighted to close the transaction and receive the net proceeds ahead of schedule,” says CFO Mike Dastoor. “The earlier close and receipt of funds will enable us to begin initiating plans to reduce stranded costs and executing a series of accelerated buybacks throughout FY24. As a result, we expect to fully utilize our current USD 2.5 billion dollar repurchase authorization this fiscal year. These actions give me confidence that we will be able to offset lower income in Q2 and deliver core earnings for FY24 in excess of USD 9 per diluted share.”
