Solectron Corporation and Centennial Technologies have entered into a definitive merger agreement for Solectron to acquire Centennial.
As a result of the transaction, Solectron will acquire all of Centennial’s design, manufacturing and marketing capabilities, which include memory module and memory card solutions based on SRAM and flash technologies for OEMs and end users in multiple markets such as telecommunications, data communications, mobile computing and medical markets. Centennial will operate under Solectron’s Technology Solutions Business Unit, which currently includes SMART Modular Technologies and Force Computers.
Under the terms of the agreement, Solectron will issue or reserve for issuance upon the exercise of assumed stock options approximately 2.96 million shares of Solectron common stock in exchange for all of Centennial’s fully diluted equity, including all outstanding Centennial stock options to be assumed by Solectron in connection with the transaction.
Based upon the average closing price of Solectron common stock last week, net of the proceeds from the exercise of stock options, the net purchase price of the transaction will be approximately US$108 million. Using Centennial’s current capitalization and assuming conversion of Centennial’s outstanding convertible preferred stock, the exchange ratio for the transaction is expected to be approximately 0.536 shares of Solectron common stock for each share of Centennial common stock.
The transaction will be accounted for as a purchase and is expected to close during the second quarter of calendar year 2001. The completion of the transaction is subject to governmental approvals, including antitrust clearance, approval of the transaction by Centennial’s stockholders and other customary closing conditions.
Solectron will assume responsibility for Centennial’s manufacturing facility and corporate headquarters in Wilmington, Mass., and all of Centennial’s sales and service offices in the United States and United Kingdom. Solectron expects to offer employment to the more than 140 manufacturing, sales, engineering and related support associates currently employed by Centennial.