Key Tronic Corporation Enters Into Letter of Intent to Acquire CDR
Manufacturing, Inc. for $46.9 Million
Transaction Expected to Expand Printed Circuit Board Assembly Capabilities and
Extend Customer Base to New Multi-National Companies
SPOKANE VALLEY, Wash., July 17, 2014 (GLOBE NEWSWIRE) -- Key Tronic
Corporation (Nasdaq:KTCC), a provider of electronic manufacturing services
(EMS), today announced that it has signed a letter of intent to acquire CDR
Manufacturing, Inc. (dba Ayrshire Electronics) for $46.9 million in cash. The
letter of intent includes a 75 day exclusivity period for completion of due
diligence and negotiation of the definitive agreement.
CDR has annual revenue of approximately $120 million and provides printed
circuit board assembly and other EMS services to a diversified customer base,
including a number of large multi-national companies. It operates
manufacturing facilities in Minnesota, Arkansas, Mississippi, Kentucky and
Mexico. The acquisition, if consummated, is expected to be immediately
accretive to earnings.
"The planned acquisition of Ayrshire would represent a major step forward for
Key Tronic, significantly expanding our printed circuit board assembly
capabilities and extending our customer base with new multi-national
companies," said Craig Gates, President and Chief Executive Officer.
Key Tronic expects to finance the transaction with cash on hand and a term
loan from Wells Fargo, and anticipates the transaction to be completed during
the first quarter of fiscal 2015.
The letter of intent is not binding on either party and the proposed
acquisition is subject to Key Tronic's completion of its due diligence, the
negotiation and execution of definitive agreements relating to the proposed
acquisition, and final approval of Key Tronic's financing for the transaction,
among other things.
Key Tronic will host a special conference call today to discuss its
preliminary financial results and expected acquisition of CDR Manufacturing at
2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call will be
available at www.keytronic.com under "Investor Relations" or by calling
888-401-4668 or +1-719-325-2315 (Access Code: 7875336).A replay will be
available by calling 888-401-4668 or +1 719-457-0820 (Access Code: 7875336).A
replay will also be available on the Company's Web site.
About Key Tronic
Key Tronic is a leading contract manufacturer offering value-added design and
manufacturing services from its facilities in the United States, Mexico and
China. The Company provides its customers full engineering services, materials
management, worldwide manufacturing facilities, assembly services, in-house
testing, and worldwide distribution. Its customers include some of the world's
leading original equipment manufacturers. For more information about Key
Tronic visit: www.keytronic.com.
Some of the statements in this press release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all passages containing verbs such as aims,
anticipates, believes, estimates, expects, hopes, intends, plans, predicts,
projects or targets or nouns corresponding to such verbs. Forward-looking
statements also include other passages that are primarily relevant to expected
future events or that can only be fully evaluated by events that will occur in
the future. Forward-looking statements in this release include, without
limitation, the Company's statements regarding its expectations with respect
to the completion of the acquisition of CDR Manufacturing. There are many
factors, risks and uncertainties that could cause actual results to differ
materially from those predicted or projected in forward-looking statements,
including but not limited to completion of the Company's due diligence
investigation of CDR Manufacturing to its satisfaction, completion of
financing arrangements with respect to the transaction on terms that are
acceptable to the Company, successful negotiation and execution of definitive
agreements with respect to the transaction, and the other risks and
uncertainties detailed from time to time in the Company's SEC filings.
CONTACT: Ron Klawitter
Chief Financial Officer
Key Tronic Corporation
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