SANM enters into agreement to aquire HDC...
(PR NEWSWIRE) Sanmina and Hadco Agree to Merge in a $1.3 Billion Transaction
Sanmina and Hadco Agree to Merge in a $1.3 Billion Transaction
Transaction Positions Sanmina as the Global Leader in Electronics
Manufacturing Services
SAN JOSE, Calif., April 17 /PRNewswire/ -- Sanmina Corporation
(Nasdaq: SANM), a leading electronics contract manufacturer, and Hadco
Corporation (NYSE: HDC), a major manufacturer of advanced electronic
interconnect products in North America, today announced that they have entered
into a definitive merger agreement in which each outstanding share of Hadco
common stock will be converted into 1.4 shares of Sanmina common stock. The
combination furthers Sanmina's vanguard role in the electronics manufacturing
services industry, strengthening the company's position as the global leader
in advanced circuit technology.
Based on Sanmina's closing price of $49.31 on April 14, 2000, the
transaction is valued at $69.04 per share of Hadco common stock, or
approximately $1.3 billion in the aggregate. Directors and certain executive
officers of Hadco have agreed to vote their shares in favor of the proposed
transaction, which should be completed late in the third or in the fourth
quarter of Sanmina's current fiscal year. The merger is intended to be a tax-
free exchange of common shares and to be accounted for as a pooling of
interests. Sanmina will take a one-time merger-related charge and expects the
transaction to be accretive to its fiscal 2000 earnings excluding one-time
charges.
Benefits of Combined Company:
-- Added circuit fabrication capacity enables Sanmina to meet increasing
customer demands for higher layer count, higher density, advanced
printed circuit boards
-- Advanced circuit technology capability furthers Sanmina's leadership in
optical networking sector
-- Complementary customer segments provide for significant growth
opportunities
-- Addition of highly qualified management and sales teams advances
Sanmina's growth strategy
-- Enhanced ability to meet future customer demands for innovative,
cost-effective technology solutions
Commenting on the merger, Jure Sola, Sanmina's Chairman and Chief
Executive Officer, said, "We are enthusiastic about our merger with Hadco,
a leading supplier of printed circuit boards in North America. Both
companies provide customers with cost-effective solutions and focus on
advanced engineering design and technology. We also share the same customer
commitment to providing high-end quality products, on-time delivery, and
highly responsive customer service. The merger with Hadco is a natural
extension of our strategy to combine our printed circuit board expertise with
our other advanced manufacturing capabilities to better serve the fast
growing, high-end/low to medium volume electronics manufacturing markets."
"We believe our merger with Hadco clearly reflects an opportunity to grow
our business by satisfying the increasing demand for leading-edge interconnect
technology. Founded as a manufacturer of high-end printed circuit boards,
Sanmina has leveraged this technology to become one of the most successful
electronics contract service companies in the world. As a result of our
end-to-end solution capabilities, customer demand for our superior circuit
technology has been very strong, requiring increased capacity."
"Importantly, the combination of our two companies enhances our ability to
meet the increasing demands by our telecommunications customers for advanced
optical networking technology. We believe this merger firmly establishes
Sanmina as the global leader in printed circuit board fabrication technology,"
Sola concluded.
Andrew E. Lietz, President and Chief Executive Officer of Hadco, said, "We
are very excited about this merger. Sanmina is a great company with a proven
track record in successfully meeting the demands of the rapidly growing EMS
market. As a result of the merger, we believe that Hadco's growth
opportunities will accelerate as we bring more value-added services to our
clients. In addition, the combined company will have increased leverage in
material procurement and supply chain management. We believe that the growth
prospects for the combined company are substantial and the business
combination is in the best interests of our employees, customers and
shareholders."
Headquartered in Salem, New Hampshire, Hadco is the leading manufacturer
in North America of complex, multi-layer rigid printed circuit boards and
backplanes. The company has approximately 1.8 million square feet of
engineering design, printed circuit board fabrication and backplane assembly
space located in key regions throughout the U.S. and Malaysia. Hadco's
customers are leading electronic manufacturers in the communications,
industrial automation, and high-end computing industries. Clients include Sun
Microsystems, Cisco, Lucent and Nortel Networks.
The merger is subject to several conditions, including the approval of
Hadco's stockholders and the expiration of the waiting period under the
federal Hart-Scott-Rodino Antitrust Improvements Act. In the event that the
Sanmina share price falls below $40.00 per share based on the average closing
stock price over a 20 day period ending on the third trading day prior to the
Hadco stockholder meeting, the Hadco Board of Directors has the right, but not
the obligation, to terminate the definitive agreement. If this event were to
occur, Sanmina has the right to increase the exchange ratio such that each
Hadco share would be converted into Sanmina common stock having a value of
$56.00. In addition, Hadco has granted Sanmina an option to purchase
19.9 percent of the outstanding shares of Hadco. This option is exercisable
only upon certain events.
About Sanmina Corporation
Sanmina Corporation is a leading electronics contract manufacturing
services company providing a full spectrum of integrated, value-added
electronic manufacturing services. Services include the manufacture of
complex printed circuit board assemblies, custom-designed backplane assemblies
and subassemblies, multi-layered printed circuit boards, custom cable and wire
harness assemblies, enclosures and the testing and assembly of electronic
subsystems and systems. The company provides these services to a diversified
base of leading OEMs in the communications, industrial and medical
instrumentation and computer sectors of the electronics industry. Sanmina
common stock trades on the Nasdaq National Market under the symbol: SANM.
Information regarding Sanmina can be found on its World Wide Web page located
at sanmina.com .
About Hadco Corporation
Hadco is a leading manufacturer of advanced electronic interconnects
products in North America. The company offers a wide array of sophisticated
manufacturing, engineering and systems integration services to meet its
customers' electronic interconnect needs. The company's principal products
are complex, multilayer rigid printed circuits and backplane and system
assemblies. Hadco provides customers with a range of products and services
that include development design, quick-turn prototype, pre-production, volume
products and backplane and system assemblies. Customers are a diverse group
of original equipment manufacturers and contract manufacturers in the
computing (mainly workstations, servers, mainframes, storage and notebooks),
data communications/telecommunications and industrial automation industries,
including process controls, automotive, medical and instrumentation. The
company operates ten facilities in the United States and one facility in
Malaysia'. Information regarding Hadco can be found on its World Wide Web page
located at hadco.com
Safe Harbor Statement
The foregoing, including the discussion regarding the company's future
prospects contains certain forward-looking statements that involve risks and
uncertainties, including uncertainties associated with economic conditions in
the electronics industry, particularly in the principal industry sectors
served by the company, changes in customer requirements and in the volume of
sales to principal customers, the ability of the company to assimilate
acquired businesses and to achieve the anticipated benefits of such
acquisitions, and competition and technological change. The company's actual
results of operations may differ significantly from those contemplated by such
forward-looking statements as a result of these and other factors, including
factors set forth in the company's 1999 Annual Report on Form 10-K filed with
the Securities Exchange Commission on December 15, 1999 and the company's most
recent quarterly 10-Q report dated January 27, 2000.
SOURCE Sanmina Corporation
-0- 04/17/2000
/CONTACT: Betsy Jordan, EVP, Chief Financial Officer, or Hannah Bruce,
VP, Corporate Communications, both of Sanmina Corporation, 408-964-3500; or
Investors, Emily Hobin Janowsky, 415-986-1591, of The Financial Relations
Board/
/Web site: hadco.com /
/Web site: sanmina.com /
(SANM HDC)
CO: Sanmina Corporation
ST: California, Illinois, New Hampshire
IN: CPR
SU: TNM
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