Micron Electronics (MUEI) Message Board

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Technology Stocks : Micron Electronics (MUEI)

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To: MONEYMAKER who wrote (2712)	12/22/1997 6:17:00 PM
From: Yakov Lurye	Read Replies (1) of 4074

I wonder what would be the net impact of selling the contract manufacturing division. The unit is priced around $300M (271M = 90% interest), but just a month ago they'd acquired the European contract operation - the price was not disclosed in the announcement. So the net cash inflow will be below $270M. During the last quarter contract manufacturing did well, but prior to this they were lagging (10K gives 1997 gross margin of 11% and $33M). My uneducated guess is that this sale reduces 1998 earnings roughly by 20c/share in exchange for $2/share one-time cash infusion. Unless they'd overpaid for the Colfontein plant, not a bad deal, especially if some big fish decides to acquire MUEI. The question now is what are they going to do with the money?

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