Selling antennas

Filtronic is to sell its mobile handset antenna business to electrical components vendor Technitrol for around $82.8 million.


Filtronic, the UK-based designer and manufacturer of microwave electronic subsystems for the wireless telecommunications and defence industries, is to sell its mobile handset antenna business, LK Products, to electrical components vendor Technitrol for around 67 million Euros or $82.8 million.


In addition, the terms of the purchase include a revenue-based deferred consideration whereby Technitrol will pay Filtronic one Euro for each Euro of revenue in excess of 85 million Euros achieved by LK for the 12 months ending 31 May 2006.


LK has an estimated global market share of about 16%. It is based in Kempele, Finland and has additional production operations in China and Hungary, with offices in South Korea and San Diego, California.


LK contributed 17%, or £50 million, of Filtronic’s total group sales of £262.9 million in its financial year ended 31 May 2005 and made an operating profit of £3.6 million.


“Filtronic will use the proceeds to eliminate its long-term bank debt, thereby freeing the company to take more advantage of the growing wireless infrastructure market,” said John Roulston, Filtronic’s CEO.


Sales at LK declined 17% year on year in 2004/2005, reflecting lower than anticipated levels of activity in the second half of the financial year with reduced levels of activity with the division’s principal customer. But in its current fiscal year, LK is expected to produce a strong recovery in revenue.


The LK business will now be part of the newly formed signal products group at Technitrol’s Pulse unit.


The deal is expected to close before 30 September 2005.