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February 8, 2001
EMG joins the big boys tomorrow
TSE listing: 'Lot more support than I anticipated,' says CEO
Kim Hanson
Financial Post
As technology stocks dip and slide, at least one sector -- electronics manufacturing -- appears to be on an
upward climb, leaving room for smaller players such as Electronics Manufacturing Group Inc. to get in on the
action.
Calgary-based EMG, which provides outsourced manufacturing services to the North American electronics
industry, moves into the big leagues tomorrow with a listing on the Toronto Stock Exchange.
"That's why you've seen the recent runup in the company's valuation," said Rob Fia, an analyst with Harris
Partners in Toronto.
EMG shares rose 50¢, to close at $6.20 yesterday on the Canadian Venture Exchange, giving the company a
market capitalization of more than $123-million.
David Snell, EMG's chief executive and co-founder, said yesterday he didn't anticipate the company would
graduate to a senior exchange so soon, but business has capitalized a lot faster than he thought.
"There is a lot more support for our model than I anticipated," he said during a visit to Toronto. "We've engaged
in larger manufacturing jobs and raised more capital in a very short period of time."
EMG assembles and designs a host of wireless headsets, computer modems and location-based products
for equipment makers that include GeoDiscovery, Novatel Wireless Inc. and MCK Communications Inc.
Since the company went public in 1999, revenue has increased to about $17-million from an initial
$12.8-million, but like most small-caps it has yet to post a profit. Mr. Snell is betting EMG's leap into a more
mature market will give it greater exposure as it begins to raise $75-million for acquisitions within the next year.
He sees a huge advantage going after clients that can't get in front of Celestica Inc., the leader in the sector.
One, it takes the competition out of the equation, he said. The other is being part of the growth early stage
companies will face once they begin to ramp up.
EMG employs 400 people and plans to add another 100 individuals by the end of the year. The company
operates manufacturing facilities in Calgary and Markham, Ont.
khanson@nationalpost.com |
