Jim, did you ever read this article by Dunne which I think summarizes PLXS very well.
Plexus poised for top-tier run
Darrell Dunn
A summer of intensive acquisition activity has repositioned midtier contract electronics manufacturer Plexus Corp. with enough manufacturing and engineering strength to make a bid for entry into the top tier over the next few years.
In the past two months, Plexus completed a merger with SeaMED Corp., as well acquiring the manufacturing assets of Shure Inc., providing the company with an expanded geographical presence, increased design engineering capabilities, and revenue momentum.
"We hate using the tier-one or tier-two designation, because that's pretty much dependent strictly [on revenue]," said Tom Sabol, chief financial officer of Neenhah, Wis.-based Plexus.
"We view ourselves as having tier-one capabilities at a tier-two size, and with a focus on high-end, high-technology-type markets," he said. "We believe there is significant growth opportunity ahead based on our engineering focus."
After years as a strong mid-tier player with steady, if unspectacular, revenue growth, Plexus' recent acquisitions have placed the company in a position to rapidly expand its revenue base.
Plexus believes its revenue will increase from nearly $400 million in its 1998 fiscal year, ended Sept. 30, 1998, to about $600 million in fiscal year 2000.
The company has internal plans to continue its acquisition effort.
"This is a growth industry, and in order to be a major player going forward, you need to grow at 25% to 30% per year," Sabol said. "Our goal is to do that, and some of that growth is going to be internal, and some of that growth is going to be with acquisitions of other [CEMs] or OEM divestitures."
In July, Plexus completed the acquisition of SeaMED, a CEM with annual revenue of nearly $100 million. The acquisition expanded Plexus' geographic presence, but equally as important, it enhanced the company's already significant position as one of the strongest CEMs in the industry in terms of engineering capabilities.
Prior to the SeaMED acquisition, Plexus had manufacturing plants in Neenhah, and Minneapolis, as well as in Richmond, Ky.; and Green Bay, Wis. The company also had design centers in Neenhah, Boulder, Colo. ; and Raleigh, N.C.
SeaMED gives Plexus its first presence in the Pacific Northwest with the company's operation at its Redmond, Wash., headquarters. The deal also adds about 80 product development engineers to Plexus.
The Redmond plant totals approximately 160,000 sq. ft., which is split about 60-40 between manufacturing and engineering.
Like Plexus, SeaMED has a very strong presence in the medical instrumentation market. The acquisition is expected to increase Plexus' medical business to about 33% of total revenue, from 24% in fiscal 1999, Sabol said.
In the medical market, SeaMED provides Plexus with FDA Class 3 medical manufacturing certification, allowing it to build life-sustaining and invasive medical products. Plexus had previously been limited to Class 1 and Class 2 medical manufacturing.
As part of the acquisition of the Shure assets, Plexus will take ownership of a 103,000-sq.-ft. plant in Wheeling, Ill. Plexus plans to lease 20,000 sq. ft. of the facility back to Shure for use in product distribution.
Plexus will complete printed-circuit-board assemblies at the Wheeling plant for Shure's wireless and digital signal-processing products. Production for Shure is expected to add about $35 million to $40 million in revenue to Plexus in fiscal year 2000, Sabol said, and an annual total of about $50 million beginning in fiscal year 2001.
Even with revenue of $600 million expected next year, Plexus intends to continue to concentrate on core end markets such as medical instrumentation, telecommunications, high-end computing systems, industrial automation, and avionics, according to Sabol.
"We believe that if you're not going to chase the high-volume, low-mix commodity business like PCs, that having a niche is important," he said. "Our niche is with engineering design, and a focus on high-end, low- to medium-volume manufacturing.
"We can service the $10 million to $50 million program better than the tier-one [CEMs] because their focus has to be on their larger customers," Sabol said. "We can compete with better service and quality. For every Nortel or Lucent that's out there, there are hundreds of companies that are in the $50 million to $200 million range that need our services."
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Plexus Makes A Move
- Acquires SeaMED Corp. in July, adding manufacturing and engineering presence in Pacific Northwest
- Acquires manufacturing assets of Shure Inc. in September
- Over next 18 months, Plexus plans to add a low-cost manufacturing center in Mexico, a manufacturing plant in the northeastern United States, and a logistics and service center in Western Europe
Copyright ® 1999 CMP Media Inc.
Regards,, Rich |
