I am sorry that I never got back to you on Pemstar. I have occasionally checked in to see what they were up to, but I have never been a particular fan of the sector. I have never actually owned the stock. Obviously, someone likes them. I hope that you have some shares.
Benchmark Electronics Signs Definitive Agreement to Acquire Pemstar
Tuesday October 17, 8:00 am ET
ANGLETON, Texas, Oct. 17 /PRNewswire-FirstCall/ -- Benchmark Electronics, Inc. (NYSE: BHE - News) and Pemstar Inc. (Nasdaq: PMTR - News) today announced that they have signed a definitive merger agreement pursuant to which each outstanding share of Pemstar common stock will be converted into the right to receive 0.160 of a common share of Benchmark at transaction close.
Based on Benchmark's closing price of $28.93 on October 16, 2006, the transaction values Pemstar at $4.63 per common share, or approximately $300 million including the assumption of Pemstar net debt. The merger is expected to be a tax-free exchange of common shares.
The merger agreement has been unanimously approved by the boards of directors of both Benchmark and Pemstar. The transaction, which is subject to the approval of Pemstar's shareholders, antitrust approvals and other closing conditions, is expected to close in the first calendar quarter of 2007, subject to the timing of completion of regulatory reviews.
"The combination of the Benchmark/Pemstar organizations brings together two well respected teams with broad and complementary customer bases and serving diversified end markets. Pemstar's customer-focused culture and operating flexibility is highly compatible with that of Benchmark," said Cary Fu, Benchmark's chief executive officer. "This acquisition also supports Benchmark's strategy to continue to expand and deepen its suite of integrated services and solutions. Pemstar's strengths in design engineering and systems integration as well as its global footprint complement our existing growing business. I am confident that the combined organization will create additional value for our combined base of customers."
"Benchmark's proven track record, strong balance sheet, and reputation as a global leader in electronics manufacturing services make the deal an attractive one for Pemstar's customers, shareholders and employees. This transaction will provide Pemstar customers with an enhanced portfolio of capabilities, expanded supply chain and operating leverage and the advantages of an increased global footprint," said Al Berning, Pemstar's chairman and chief executive officer. "Our customers will benefit greatly from Benchmark's capabilities in design engineering, complex manufacturing and test and repair, as well as expanded low-cost operations in Asia. There is a strong cultural fit between the two organizations, which will facilitate a smooth transition and ensure consistency of ongoing service delivery. The management team and I strongly support the transaction and the opportunity it provides."
Pemstar was founded in 1994 and is an established leader in the EMS industry, with Fiscal Year 2006 (March) revenues of $871 million, including the additional revenue resulting from the full turnkey operation with a wireless handset customer. Pemstar has a global footprint of 11 design, manufacturing and fulfillment locations worldwide and employs approximately 3,500 people. Pemstar provides a comprehensive range of global engineering, product design, automation and test, manufacturing and fulfillment services to customers on a global basis through facilities strategically located in North America, Asia and Europe.
Benchmark Electronics, Inc. is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include facilities in seven countries. Benchmark's common shares trade on the New York Stock Exchange under the symbol BHE.
A conference call hosted by Benchmark and Pemstar management will be held on October 17, 2006 at 10:00 am (Central time) to discuss this announcement. This call will be broadcast via the Internet and may be accessed by logging on to Benchmark's website at bench.com or Pemstar's website at pemstar.com.
Credit Suisse acted as financial advisor to Benchmark and Needham & Company, LLC acted as financial advisor to Pemstar. Cravath, Swaine & Moore LLP acted as legal advisor to Benchmark and Dorsey & Whitney LLP acted as legal advisor to Pemstar.
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