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Technology Stocks : Flextronics International (FLEX) -- Ignore unavailable to you. Want to Upgrade?

To: patroller who wrote (508)	1/29/1998 5:08:00 PM
From: 18acastra	Read Replies (1) \| Respond to of 1422

Patroller - think build rather than buy is better, but timing is issue. Need to quickly get capacity in place to meet customer demand, only way to do it in Silicon Valley is to buy it - no space available (alternatively, in Mexico they add capcity by building it themselves). I think of this as real estate deal. As long as they pay nothing more than value of land and PP&E + reasonable multiple of cash flow for existing business, the purchase funds itself (i.e. they pay X and receive X in NPV of existing cash flow from acquired facility). The value is created when they use their market position and customer relationships to fill excess capacity to bring new cash flow into the facility that they didn't already pay for in purchase price. My opinion.