Flextronics to acquire Microcell for $80 million
Flextronics has today signed an agreement to acquire Microcell Group, an original design manufacturer of wireless Global System for Mobile Communications (GSM), General Packet Radio Service (GPRS), and Enhanced Data Rates for Global Systems for Mobile Communications Evolution (EDGE) handset products.
Microcell's operations include product creation centres in Finland and Denmark, administrative offices in Switzerland and USA, and a manufacturing operation through a joint venture in Nanjing, China.
The agreement provides for an initial cash purchase price to the shareholders of Microcell of approximately $80 million, plus the assumption of approximately $120 million of net liabilities.
The purchase price is subject to adjustments, based upon Microcell achieving specified levels of earnings through December 2005.
'In addition to increasing capabilities for our telecom OEM customers, this acquisition will bolster Flextronics' ODM initiative in the areas of GSM, GPRS and EDGE mobile phone technologies,' said Michael E. Marks, Chief Executive Officer of Flextronics.
Marks added: 'The two companies have had a close working relationship for the past few years during which Flextronics has been a major supplier to Microcell.
'This long-standing relationship gave us unique insight into their management team, customer relationships and technical capabilities while we evaluated this potential combination.'
The acquisition is expected to close in October and is subject to customary conditions, including regulatory approvals and approval by the shareholders of Microcell.