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.”