05 Jun 07. Silver Lake and TPG’s TPG Capital LLC last night agreed to purchase telecommunications-equipment company Avaya Inc. for about $8.2bn, marking the second big buyout in the telecom industry in two weeks. The victory of private-equity buyers underscores the continued market power of buyout shops, which are able to trump strategic buyers on deals by using cheap debt and reducing their investment-return thresholds. The deal also would signal the increased interest of private-equity firms in telecommunications equipment, an area in which many vendors, like Avaya, generate steady cash flow while taking on little debt. It would follow the $27.5bn buyout of wireless carrier Alltel Corp. in late May by TPG Capital and the private-equity arm of Goldman Sachs Group Inc. Avaya has a market capitalization of more than $7bn with $829m of cash and no debt. The deal is expected to close in the fall. The buyers will pay $17.50 a share for the Basking Ridge, N.J., company. That represents a 28% premium to where the stock was trading before the Wall Street Journal reported a week ago that Avaya was in acquisition talks. (Source: WSJ)
04 Jun 07. Flextronics to Acquire Solectron for $3.6bn. Flextronics International Inc. entered a definitive agreement to acquire Solectron Corp. for about $3.6bn in a deal that will create an electronics-manufacturing company with $30bn in annual revenue. The companies, which are hired to design, produce and assemble everything from cellphones to mainframe computers, said the deal announced Monday is aimed at improving their competitive position in a sector suffering from overcapacity and pricing pressure. Singapore-based Flextronics said it will pay shareholders of Solectron in either cash or stock. Shareholders will receive either 0.3450 Flextronics shares, worth $4.04 a share, or $3.89 cash for each Solectron share. The agreement stipulates that between 50% and 70% of Solectron shares will be converted to Flextronics shares. The deal is expected to close by the end of the year. Following the acquisition, Solectron, Milpitas, Calif., will be a unit of Flextronics, and Solectron shareholders will own 20% to 25% of Flextronics outstanding shares. Solectron will also have the right to nominate two directors approved by Flextronics to the board of the combined company. Flextronics said some cost savings will be seen in the first 12 months after closing, but that it could take 18 to 24 months to fully integrate the companies. The company sees $200m in synergies upon full integration, and expects the deal to add 15% to earnings per share. The combined company will have about 200,000 employees, including 4,000 design engineers, and will operate in 30 countries.
Jun 07. Advent, a VISLINK Group plc company, the broadcast systems specialist has employed Matthew Richards, Defence Business Unit Director, formerly of TRL Technology, to spearhead its drive into the defence business. Advent’s uplink technology is not only key to the successful running of the modern battlefield. The equipment is widely used to provide a vital link back home for servicemen and women around the world. Based upon the same proven components as the company’s commercial range, Advent offers a variety of customised, integrated or co-designed solutions – ranging from highly rugged flyaway devices to flexible vehicle-mounted systems. Advent’s electronic subsystems can also be seamlessly integrated into wider communications theatres to enable ever more effective decision-making at every level of command. Advent also announced its membership of the Defence Manufacturers Association (DMA), in line with the recent creation of its dedicated defence solutions business.
31 May 07. (NYSE: CGT; TSX: CAE) – CAE today reported financial results for the fourth quarter and fiscal year ended March 31, 2007. Net earnings were $34.3m ($0.14 per share) this quarter, compared to $9.2m ($0.04 per share) in the fourth quarter of last year. Net earnings f