Electronics Production | August 13, 2007
Lite-On buys Perlos for EUR 277m
Perlos Corporation has entered into a combination agreement with Lite-On Technology, a supplier in optoelectronics components headquartered in Taiwan, under which Lite-On will make a voluntary public tender offer to acquire all of the issued and outstanding shares of Perlos Corporation.
The price offered for each share validly tendered in the Tender Offer shall be EUR 5.20 in cash (the Consideration) or in total EUR 277 million. The Consideration represents a premium of 40,5 per cent compared to the closing price of EUR 3,70 of the Perlos shares on the OMX Nordic Exchange Helsinki on the 10th August 2007, the last trading day before the announcement of the Tender Offer. The Tender Offer also covers Perlos' 2002 and 2005 option programmes. Lite-On has received irrevocable commitments to tender shares held by Oy G.W. Sohlberg Ab (GWS), in total representing 29.14% of the votes and share capital of Perlos. The Board of Directors of Perlos entered into the combination agreement with Lite-On as it regards the Tender Offer and the offered Consideration as highly attractive. The Board of Directors will issue a recommendation to the shareholders of Perlos regarding the Tender Offer after the tender offer document has been made available to the Board of Directors, in accordance with Finnish securities laws. The Board of Directors has instructed Summa Capital to evaluate the Consideration. Pursuant to the combination agreement, the parties have agreed to use their best efforts to facilitate the execution of the Tender Offer in accordance with its terms. Perlos has also agreed to to carry on its business in the ordinary course, and has agreed not to solicit or further other offers subject always, however, to the fiduciary duties of the board. The combination agreement can be terminated in certain instances of breach of contract, and also if the Tender Offer has not been completed by November 30, 2007. Further details of the Tender Offer appear in the tender offer release issued by Lite-On annexed to this stock exchange release. When closed, the deal would create a new powerhouse into the handset supply chain. Lite-On, one of the largest electronics companies in the world and Perlos, a global supplier of handset mechanics would form one of the most powerful operatorsin the global handset industry. The joint product and service offering of Lite-On and Perlos would create superior customer benefits. The product offerings of the two companies would complement each other, as Perlos is strong in mechanics and Lite-On correspondingly in electronics. In addition, Perlos' great manufacturing presence in the world coupled with Lite-On Tech's strong relationships in the Taiwan/China handset supply chain benefits both sides. In addition, the clientele of both companies would complement each other. - This is truly an exciting opportunity. The extensive technology portfolio of Lite-On combined with Perlos' outstanding capabilities in handset mechanics would immediately bring benefits to our customers. In addition, the profound experience of Lite-On and its financial resources would enable further development of the value offering, says Matti Virtanen, President and CEO of Perlos. - Starting from 2007, Lite-On Technology has launched its "Customer-Centric" growth strategy where Lite-On Technology provides one-stop-shopping solutions to customers via its wide range of component offerings. This acquisition would equip Lite-On Tech with mechanical capabilities in addition to its electronic component power, says Warren Chen, CEO of Lite-On Core-Investment. The mutual plan of the parties is that Perlos will continue its operations under Perlos brand and company name. The anticipated change in the ownership is not expected to have any immediate impact on the personnel. The management of Perlos would continue in its current positions and locations. - We will also continue to improve our competitiveness as well as the renewal of our production model in line with the Lean Manufacturing principles. Today's news will not change our plans in this front, Virtanen stresses. Further information about the Tender Offer and its terms will be disclosed in the Tender Offer Document. The Offeror is expected to release the Tender Offer Document in approximately 3 weeks time. Lite-On Technology Corporation was founded in 1975 and established Taiwan's first LED operation. Lite-On Tech had its IPO in 1983 and was the first technology company to be listed on Taiwan Stock Exchange. In 2002, four companies, including Lite-On Electronics, Lite-On Technology, Silitek and GVC, merged into the new Lite-On Tech that we know. Over the last few decades, Lite-On Tech has grown tremendously from its LED business and expanded into other optoelectronic components including Power Supply, LCD Monitors, Imaging products, etc. Today, more than 90% of Lite-On Technology's business is derived from products ranked top three in the world. For handset customers, Lite-On provides phone camera modules, LED, keypads, GPS, and various types of sensors. The Lite-On Group consists of several fully or partly owned companies, including listed companies in Taiwan, Japan and the USA. The net sales of the Group amounted to approximately USD 7.2 billion in 2006 and it employs approximately 55,000 people. The shares of Lite-On Technology Corporation (2301) are traded on the Taiwan Stock Exchange. Perlos Corporation, founded in 1953, is one of the world's leading producers of handset mechanics. Its service offering covers the whole product life cycle from product design to manufacturing, logistics and new product versions. The company operates globally and most of its production facilities are located in Asia. It also has significant production in Europe and North and South America. The company is headquartered in Finland. Perlos' net sales in 2006 amounted to EUR 673.6 million of which 35% came from Asia, 44% from Europe and 21% from North and South America. The company employed approximately 8,800 people worldwide in the end of June, 2007. Perlos share (POS1V) is traded on the OMX Nordic Exchange Helsinki.