Viasystems and Merix to merge

Citation

(2010), "Viasystems and Merix to merge", Circuit World, Vol. 36 No. 1. https://doi.org/10.1108/cw.2010.21736aab.001

Viasystems and Merix to merge

Article Type: Industry news From: Circuit World, Volume 36, Issue 1

Viasystems Group, Inc. and Merix Corporation have entered into a definitive agreement to merge their businesses. When completed, the merger will result in the largest publicly traded printed circuit board (PCB) manufacturer by revenue in the USA. Viasystems and Merix have complementary core competencies that will enable the combined organization to provide customers with a complete spectrum of services and technology for both quick-turn prototyping and high volume PCB manufacturing in Asia and North America.

Major terms of the agreement

Each Merix share will be converted into approximately 0.11 newly issued shares of Viasystems, subject to adjustment, which will be publicly traded on the NASDAQ upon completion of the transaction. Approximately, 98 per cent of holders of Merix $70 million convertible senior subordinated notes due 2013 have agreed to enter into an exchange agreement whereby their notes will be exchanged for approximately 1.4 million newly issued Viasystems shares plus a total cash payment of approximately $35 million.

Following the merger transaction and note exchange, approximately 20 million newly issued Viasystems shares will be outstanding. Existing Viasystems shareholders will own approximately 80.5 per cent of the combined company, existing Merix shareholders will own approximately 12.5 per cent and Merix convertible note holders will own approximately 7.0 per cent. Based on the results for the twelve months ended June 30, 2009 for Viasystems and August 29, 2009 for Merix, on a pro forma basis, the combined operation would have had approximately $840 million of revenue. Pro forma adjusted EBITDA for that period would have been approximately $68 million. Adjusted EBITDA is defined as operating income (loss) adjusted to exclude charges for depreciation, amortization, stock-based compensation and restructuring and impairment costs. The companies expect annual cost synergies of approximately $20 million can be achieved through steps initiated within the first 60 days post completion of the transaction.

Following the merger transaction, the combined company will have approximately 13,000 employees and manufacturing capacity exceeding 4.3 million square feet in China and 375,000 square feet in North America.

Benefits of the transaction

The merger creates a large and diversified customer base – among the top ten customers of both companies, only three overlap. Merix' facilities will offer Viasystems' 125 customers' complex PCB production in the USA, including quick-turn and prototyping capabilities not offered today. Merix' facilities and capabilities in the USA will provide Viasystems the opportunity to access the growing aerospace and defence industry. Viasystems provides Merix' 800 customers with expanded scale of Asian-based high-volume, quick-turn and HDI-PCB manufacturing capabilities, as well as new electro-mechanical solutions.

About Viasystems Group, Inc

Viasystems is a worldwide provider of complex multilayer, rigid PCBs and electro-mechanical solutions. Its PCBs serve as the foundation for almost all electronic equipment, and its related electro-mechanical solutions include systems integration, assembly, final product testing and fulfillment. The company's 10,000 employees in North America and Asia serve more than 125 customers in the automotive, telecommunications, computer and data communications and industrial and instrumentation/medical/consumer markets. For additional information about Viasystems, please visit the company's web site at: www.viasystems.com

About Merix Corporation

Merix is a leading manufacturer of technologically advanced, multilayer, rigid PCBs for use in sophisticated electronic equipment. Merix provides high performance materials, quick-turn prototype, pre-production and volume production services to its customers. Principal markets served by Merix include communications and networking, computing and peripherals, test, industrial and medical, defence and aerospace and automotive end markets in the electronics industry. Merix has 3,000 employees in North America and Asia serving approximately 800 customers in the telecommunications/networking, automotive, computer and data, industrial/medical and test and defence and aerospace markets. Additional corporate information is available on the internet at: www.merix.com