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Celestica to acquire rival contract manufacturer
The transaction is expected to boost Celestica's sales by almost $1 billion, likely pushing it past Hon Hai Precision to the No. 4 global EMS provider position behind market leaders Flextronics International Ltd., Solectron Corp. and Sanmina-SCI. The transaction would give MSL access to Celestica's global supply chain footprint and especially low-cost manufacturing facilities in Eastern Europe and China while expanding the breadth of services offered by Celestica. 'This acquisition supports Celestica's strategy to continue to expand and deepen its suite of integrated services and solutions," said Eugene Polistuk, Celestica's chairman and chief executive, in a statement. "MSL's strengths in order fulfillment, build-to-order assembly and high-speed automated manufacturing complement our current offerings," Polistuk added. The Canadian EMS provider, which had 2002 revenue of $8.3 billion, said it will swap each MSL shares for 0.375 of Celestica subordinate voting shares and pay MSL Series A and Series B shareholders $52.50 per share plus accrued dividends in cash or Celestica shares. Celestica said it expects to pay not less than $6 and not more $7.25 for each MSL share depending on the closing price of MSL's shares on the third business day prior to the closing of the transaction. Based on the given price range, the transaction could cost Celestica $276 million or as much as $320 million plus accrued dividends payable to MSL preferred shares holders. MSL, Concord, Mass., has approximately 34.4 million common shares and 1.33 million Series A and Series B preferred shares outstanding, the companies said. News of the deal sent MSL's share price soaring 19% today, to a high of $6.65 from Tuesday's closing price of $5.60.
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