Mergers & Acquisitions

Mergers & Acquisitions

April 04, 2012

Viasystems to Buy Manufacturing Services Company DDi for $268 Million

To further strengthen its position in the printed circuit boards (PCB) industry, St. Louis-based PCB manufacturer Viasystems Group Inc. has entered into a definitive agreement to purchase electronics manufacturing services provider DDi Corp. (News - Alert) for $268 million. According to the buyer, the company will pay $13 per share for DDi, which is a 6 percent premium over DDi's closing stock price of $12.26 on Tuesday. This deal, which has been approved by the board of directors of both the companies, is expected to close in this quarter or early next quarter.

However, the total value of the transaction is about $282 million, which includes DDi’s debt, said Viasystems. Also, the acquisition is subject to customary closing conditions, said the buyer.

With this acquisition, Viasystems will combine its large, high volume footprint in China and North America with DDi’s high mix, low volume footprint in North America to create a global player in the PCB industry. Also, according to Viasystems, the DDi acquisition will increase its market share in the technically demanding military and aerospace market and the growing industrial & instrumentation space while broadening its customer base.

In a statement, said David Sindelar, CEO of Viasystems, “This transaction combines two market leaders and strengthens Viasystems’ position as a world-class leader in PCB and related electro-mechanical solutions by expanding our technology and manufacturing capabilities, diversifying our end markets and broadening our customer base and product portfolio. Ultimately, this transaction creates a larger platform which Viasystems can better leverage to serve our customers and to generate attractive returns for our shareholders. Further, the addition of DDi strengthens Viasystems’ financial model and enables us to achieve even higher levels of profitability and cash generation.”

In addition, the acquisition of DDi expands Viasystems’ quick-turn manufacturing capability and adds flex and rigid-flex product offerings, which will provide additional sales opportunities through Viasystems’ existing customer base, said the buyer.

Mikel Williams, DDi’s CEO commented, “We believe that this transaction is an excellent opportunity to realize value for DDi shareholders and creates new opportunities for our customers and employees. Viasystems provides the opportunity for our customers to expand with the combined company into the Asian-based high volume market while also having the ability to offer our leading quick-turn and prototyping capabilities to Viasystems’ customers.”

According to Viasystems, the combined company will have approximately 15,650 employees. It is expected to immediately add to Viasystems' adjusted earnings per share. And is anticipated to save Viasystems at least $10 million a year prior to accounting for income tax effects, said Viasystems. The company expects to realize these savings within six months of the deal.

Edited by Jennifer Russell

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