Flextronics International (FLEX) Message Board

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Technology Stocks : Flextronics International (FLEX)

FLEX 62.91

+2.2%

Nov 12 3:59 PM EST

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To: kolo55 who wrote (368)	10/20/1997 5:01:00 PM
From: 18acastra	of 1422

From conference call Neutronics seems like a great acquisition. Highlights: Neutronics $170mm of revenue this year (CY 1997), will go to $300mm next year at least based on business already booked - huge opportunity to grow this number as can grow existing customers who will be more comfortable giving more business to Neutronics as part of larger Flextronics organization - believe EBITDA margins should be the same as Flextronics and pay only 15% taxes, so deal should be accretive next year Strategically strong acquisition - majority of manufacturing assets in Hungary which is low cost labor and Central European presence - Phillips a 55% customer, so buying a good customer relationship - Nokia also a significant customer - Austrian facility is high-value added/front-end engineering capability To me, this is the big strategic/non-financial benefit of the acquisition. European companies are just starting to outsource like American companies have done for a long time. Now Flextronics has big relationships with Ericcson, Phillips and Nokia and low-cost Central European manufacturing to serve them as they rapidly expand their outsourcing programs. Also bought a strong management team. A brilliant strategic stroke by Marks. My opinion.

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