Jabil makes contract killing

The majority of Philips Contract Manufacturing Services (PCMS) division is to be sold and the business transferred to Jabil Circuit in a 235 million Euro deal.

The majority of Philips Contract Manufacturing Services (PCMS) division is to be sold and the business transferred to Jabil Circuit.

The acquisition includes nine manufacturing plants and a 4 billion Euro, four-year product supply agreement.

Tim Main, President and CEO of Jabil Circuit said the transaction would extend his business into the consumer electronics industry, a $150 billion segment with a current outsourcing market penetration of just 9%.

According to the agreement, Jabil will take over Philips’ manufacturing operations on three continents, including sites in Brazil, China, Hungary, India, Poland and Singapore and three other sites in Europe. Jabil will employ the current Philips management teams from each location as well as approximately 5000 manufacturing employees, including over 150 product development and design engineers.

Jabil will provide design and engineering services, new product introduction, prototype and test services as well as procurement, PCB assembly and final assembly and integration for a wide range of Philips consumer products, including consumer televisions and DVD’s, storage and display products audio systems and set top boxes.

Completion of the transaction, which is subject to the customary consultation procedures with trade unions, workers councils and clearance by the competition authorities, is expected to take place later this year.

The purchase price is approximately 235 million Euro, net of assumed liabilities.