This one caught me by surprise.
But I'm pleased. ABB is a world-class company and an important new customer. They announced one new customer program (for Phillips) at the October earnings release, five new customers in November (Acer, Rockwell, Kodak, Compaq and a large telecom customer, for whom they wouldn't reveal the name), and now an ABB plant acquisition in December. Seems like they have these announcements lined up.
ABB seems like a new business sector penetration for the EMS providers. I wonder if other competitors in the industrial electronics sector, like GE, Honeywell, Foxboro etc are next.
I don't have an annual revenues estimate for the acquisition, but using $250-370k per employee and 545 employees, I estimate the annual revenues could be in the $130-200M range. We also don't know the terms of the plant purchase deal, like how much it cost.
Seems like one of the important reasons in acquiring the plant, was this plant's expertise in industrial electronics. I wonder if Flextronics is taking over some engineering responsibility (and engineering personnel) with this purchase. If there is a lot of high value added work being done, then the margins for this business could be pretty decent. This biz doesn't seem to be low margin.
all I have for now, Paul |
