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Written by Mike Buetow
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Thursday, 05 June 2008 05:11 |
NEWARK, NY -- EMS provider IEC Electronics Corp. has completed the
acquisition of Val-U-Tech Corp., a privately held manufacturer of wire
harness assemblies located in Victor, NY, for approximately $10 million.
For the period ended Dec. 31, Val-U-Tech had revenue of $11 million and expects that its revenue for the six months ending June 30 will be approximately $6.9 million, up from $4.4 million last year.Val-U-Tech
serves military, medical and industrial customers and IEC believes the acquisition leverages the existing
customer base of both companies and could lead to cross-selling opportunities.
IEC financed the transaction with a credit facility from M&T Bank,
seller notes and issuance of stock. IEC fixed approximately $7.2 million
of the purchase price at a weighted average of 5.1% for five years. The
balance of the purchase price came from the issuance of 500,000 shares
of IEC stock and a draw on IEC’s working
capital line. M&T Bank has provided a $1.5 million equipment line of credit and is
supporting IEC’s working capital requirements
with a $9 million revolving credit line at LIBOR rates. IEC chairman and CEO W. Barry Gilbert said, "Val-U-Tech has been very successful in growing both its sales
and earnings at double digit rates for the last few years. Some of IEC’s
customers have anticipated cable harness projects to be awarded over the
next year. With Val-U-Tech’s management team
and IEC’s support we are reasonably confident
of winning our share of these programs. This acquisition should
significantly contribute to our earnings.”
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