Hi Patroller,
Flex is paying 2x revenue for NatSteel if the S&P release below is accurate. Seems pretty pricey when ECMs are now selling for well under 1x revenue. Not that I would second guess Marks, I certainly could never have built the company he has. But I always feel compelled to get suspicious when companies keep buying out other companies,especially when the price paid seems quite a bit higher than the valuations that the market is giving both the acquirer and other companies in the sector. Got any comments on the acquisition?
Best wishes,
Sam
[p.s. I know this is the JBL thread, but since most of the ECM talk has migrated here over the past few months, and since many of us who follow JBL also follow FLEX, I thought it would be OK to post this here.]
Reuters Market News
S&P comments on Flextronics International
(Press release provided by Standard & Poor's)
NEW YORK, May 21 - Flextronics International Ltd. (NasdaqNM:FLEX - News; BB+/Stable/--) has offered to acquire NatSteel
Broadway Ltd. (P.NSB), a Singapore industrial supplier, for about $364 million in cash. NatSteel Broadway had revenue of about
$188 million in 2001. Standard & Poor's said that the transaction would have no effect on its ratings or outlook of Flextronics,
which incorporate the expectation of moderate-price acquisitions.
Flextronics expects the acquisition to strengthen its manufacturing presence in China, with the integration of NatSteel Broadway's
toolmaking, plastic molding, and electronics manufacturing capabilities expanding its supply chain offerings. NatSteel Broadway
has about 2 million square feet of manufacturing facilities in China and a smaller operation in Hungary. |
