ACT Announces Definitive Merger with CMC Industries.
Monday May 10, 4:46 pm Eastern Time
Company Press Release
SOURCE: ACT Manufacturing, Inc.
ACT Manufacturing, Inc. Announces Definitive Merger Agreement
With CMC Industries, Inc.
HUDSON, Mass., May 10 /PRNewswire/ -- ACT Manufacturing, Inc. (Nasdaq: ACTM - news)
and CMC Industries, Inc. (Nasdaq: CMCI - news) today jointly announced they have
signed a definitive merger agreement.
Revenues of the combined companies for the last twelve months would have been
approximately $582 million, positioning the combined companies as the seventh
largest publicly traded electronics contract manufacturer. Under the terms of
the agreement, each share of CMC Industries $0.01 par value common stock will
be exchanged for 0.5 shares of ACT Manufacturing $0.01 par value common stock.
The merger is subject to the approval of shareholders of both companies, as
well as other customary regulatory and other closing conditions. The merger is
expected to be accounted for as a pooling of interests. It is expected that
the transaction will be accretive in calendar year 2000.
Commenting on the merger, Mr. John A. Pino, Chairman and Chief Executive Officer
of ACT, said, ''This merger addresses many of our strategic business development
objectives, provides a significant opportunity to increase value to our shareholders
and strengthens our ability to bring high quality, value-added contract manufacturing
services to our existing and future customers on a global scale. CMC brings a West
Coast presence with its Santa Clara, California facility and provides low cost
manufacturing alternatives in both its Corinth, Mississippi and Hermosillo, Mexico
operations. We have no overlapping customers with CMC so the immediate diversification
of our customer bases will be significant. The combined company, which is double the
scale of each individually, creates several opportunities to leverage business
development with existing customers.
''Along with the future business development opportunities, the merger provides
numerous operational synergies. CMC uses the same manufacturing equipment and
systems platform as ACT. This should allow us to efficiently integrate all operations
and quickly provide a seamless organization with greater capabilities and the ability
to reap higher resource efficiencies.
''The combined company will have nearly one million square feet of capacity, making
it one of the true leaders in the global EMS marketplace. We also look forward to
the combined strength of the ACT and CMC management teams.''
Mr. Matthew Landa, President and CEO of CMC, added, ''ACT is an ideal merger partner
for CMC. ACT's focus on programs requiring high levels of engineering expertise is
consistent with CMC's long term strategic vision to develop the most flexible
engineering-driven operations in the most important OEM technology centers in America.
The combination allows for ACT's ''front- end'' high-technology production centers in
Hudson, Massachusetts and Atlanta, Georgia to be coupled with CMC's technology production
center in Silcon Valley and CMC's low cost volume operations in Mississippi and Mexico.
''Additionally, ACT's Dublin, Ireland facility will provide a European solution for CMC's
current customer base. From a logistics and manufacturing cost standpoint, the combined
company will be well positioned in the key locations around the world to provide complete
product life cycle service in the most flexible, responsive and cost-effective manner.''
CMC also pre-released results for its quarter ended April 30, 1999 in a separate press
release today.
ACT Manufacturing, Inc., headquartered in Hudson, Massachusetts, provides value added
electronics manufacturing services for original equipment manufacturers (''OEMs'') in
the networking, computer, telecommunications, industrial and medical equipment markets.
The Company provides OEMs with complex printed circuit board (''PCB'') assembly
primarily utilizing advanced surface mount technology (''SMT''), mechanical and molded
cable and harness assembly, electro-mechanical subassembly, and total system assembly
and integration. For further information, visit ACT's home page at actmfg.com.
Headquartered in Santa Clara, California, CMC Industries is a leading provider of electronics
manufacturing services to original equipment manufacturers in the telecommunications,
computer and electronics industries. The Company has operations in Corinth, MS;
Santa Clara, CA; Hermosillo, MX; Huntsville, AL and Taipei, Taiwan. For further
information, visit CMC's home page at cmcmfg.com.
This press release contains forward-looking statements subject to risks and uncertainties
that could cause actual results to differ materially from those anticipated, including
statements concerning the effects of the merger, expected financial and operating results,
synergies, growth of the customer base, future customer shipments, and the plans and
objectives of management. Those risks and uncertainties include, among others: the risk
of not integrating the CMC business successfully; the inability to achieve expected
synergies; costs associated with the merger; the inability to close the merger in a
timely fashion; the inability to obtain approval of CMC's stockholders; the inability
to obtain governmental approvals for the merger; the effectiveness of managing
manufacturing processes; increased competition and its effects on pricing, revenues
and gross margins, and its customer base; future customer demand; the Company's ability
to timely complete, configure and ship products; and changes, reductions, delays or
cancellations of customer orders. In addition, the Company's business and results of
operations are subject to numerous additional risks and uncertainties, including the
short-term nature of customer orders, customers' announcements and introduction of new
products or new generations of products, evolutions in the life cycles of customers'
products, inventory obsolescence, currency exchange rate movements, trends in the
electronics industry and changes or anticipated changes in economic conditions. For
a more detailed discussion of the risks and uncertainties of the Company's business,
please refer to the Company's periodic reports and registration statements filed with
the Securities and Exchange Commission, including the Company's annual report on
Form 10-K for the period ended December 31, 1998.
SOURCE: ACT Manufacturing, Inc. |
