Yageo Corporation (TAIEX: 2327) (“Yageo”) and KEMET Corporation
(“KEMET”) (NYSE: KEM) today announced that they have entered into a
definitive agreement under which Yageo will acquire all of the
outstanding shares of KEMET’s common stock for US$27.20 per share
in an all-cash transaction valued at US $1.8 billion, including the
assumption of net debt. The transaction has been approved by the
Boards of Directors of both companies.
The purchase price represents a premium of 26% to KEMET’s volume
weighted average price (“VWAP”) for the last 30 trading days and
37% to its VWAP for the last 90 trading days.
Established in 1919 and headquartered in Fort Lauderdale,
Florida, KEMET is a leading global supplier of high-end electronic
components with a global footprint that includes 23 manufacturing
facilities and approximately 14,000 employees located in 22
countries in the Americas, Asia and Europe. KEMET’s main products
include tantalum capacitors, ceramic capacitors, magnetic, sensors
and actuators, and film and electrolytic capacitors. KEMET’s
products serve a number of applications, such as advanced
automotive electronics, industrial applications, aerospace,
medical, as well as smartphones, cloud/networking equipment,
wireless communications, alternative energy and 5G technology.
Holding more than 1,600 patents and trademarks worldwide, KEMET has
established a leading position for its products via its advanced
R&D and technical staff and design-in capabilities.
Together with KEMET, Yageo will be well positioned as a one-stop
provider of passive electronic components, including a leading
portfolio of polymer, tantalum, ceramic, film and electrolytic
capacitors, chip resistors, circuit protection as well as
magnetics, sensors and actuators, all addressing a full range of
end market segments. The combined company will have an enhanced
global footprint and be better able to partner with long-standing,
blue chip customers worldwide through a combined 42 manufacturing
plants and 14 dedicated R&D centers.
Pierre Chen, Chairman and Chief Executive Officer of Yageo,
said, “KEMET has remarkable technology innovation capabilities and
a proven track record of integrating cross-border acquisitions. We
have been following their success with great admiration and look
forward to creating a new legacy for the combined company. KEMET
gives us the extraordinary opportunity to combine our strengths to
achieve synergies in product and technology offerings as well as
geographic coverage. The integration will enhance our ability to
serve customers in consumer electronics as well as in the high-end
automotive, industrial, aerospace, telecom and medical sectors. I
look forward to partnering with KEMET’s employees to drive future
growth and deliver enhanced value for our shareholders and
customers.”
William M. Lowe, Jr., Chief Executive Officer of KEMET, said,
“We are pleased to reach this agreement with Yageo, which will
deliver the certainty of immediate cash to our shareholders at a
premium. After a thorough process, the KEMET Board of Directors
determined that this transaction is in the best interests of KEMET
shareholders, customers and employees, and is a testament to our
team’s dedication to providing our customers with the broadest
selection of passive component technologies and superior service in
the industry. I am confident that the combination of these two
companies will provide customers with an enhanced experience and
our employees with greater opportunities worldwide and we look
forward to completing this transaction and ensuring a seamless
transition.”
Transaction Benefits
The combination of Yageo and KEMET will create an industry
leader in the $28 to $32 billion passive components industry, with
combined annual revenues of approximately US$3 billion1. Yageo and
KEMET each have a proven track record of completing major
cross-border acquisitions and believe this transaction will
generate greater value for customers and shareholders of both
companies.
The acquisition of KEMET will:
- Expand Yageo’s product portfolio and enhance Yageo’s ability to
serve as a one-stop product solution to customers serving a range
of segments and mission-critical applications;
- Enhance Yageo’s global footprint with additional operational
scale across North America, Europe and Asia with an increased
ability to penetrate attractive, high-growth segments and
applications;
- Drive profitability with meaningful cost synergies and greater
efficiencies by leveraging KEMET’s structural transformation that
resulted in increased and sustainable margins, as well as an
enhanced durability of KEMET’s revenue base;
- Enable Yageo to leverage KEMET’s presence and success in Japan
through the consolidation synergy of KEMET and TOKIN;
- Increase Yageo’s presence providing advanced products to the
automotive electronics, 5G networking and communications, robotics
and automation and industrial segments, including power supply;
and
- Scale KEMET’s business in Greater China and ASEAN region
through Yageo’s regional presence and sales channels
Financing, Timing and Approvals
The transaction is not subject to a financing contingency. Yageo
intends to fund the transaction with a combination of cash on hand
and committed financing.
The transaction, which is expected to close in the second half
of 2020, is subject to customary closing conditions and the receipt
of required regulatory approvals.
Following close of the transaction, KEMET will become a wholly
owned subsidiary of Yageo and KEMET’s common stock will no longer
be listed on any public market.
Advisors
Citi is serving as financial advisor to Yageo, and Simpson
Thacher & Bartlett LLP and Tsar & Tsai Law Firm in Taiwan
served as legal advisors. Goldman Sachs & Co. LLC is serving as
financial advisor to KEMET and Skadden, Arps, Slate, Meagher &
Flom LLP is serving as legal advisor.
Conference Call and Webcast
KEMET will host a conference call and webcast tomorrow, November
12, 2019, at 8:00 a.m. EST to discuss the transaction and results
for the second quarter ended September 30, 2019.
To access the call via telephone, participants in the United
States should dial 1-800-416-8033, and participants outside the
United States should dial 1-706-643-0979. Participants should
reference "KEMET Corporation" and Conference ID #9085025.
Participants can view a corresponding presentation from the KEMET
website at www.KEMET.com by clicking on the conference call link in
the Investor Relations section of the website. The presentation
will be available immediately prior to the beginning of the call.
Following management’s comments, there will be an opportunity for
questions.
In conjunction with the conference call, there will be a
simultaneous live broadcast over the internet that can be accessed
at http://ir.KEMET.com. A replay of the conference call will be
available until midnight, November 25, 2019, through the same
link.
About Yageo
Yageo’s common stock is listed on the Taiwan Stock Exchange
under the ticker symbol “2327” (TAIEX: 2327 TW). Yageo is a leading
global electronic component company with capabilities on a global
scale, including production and sales facilities in Asia, Europe
and the Americas. The company provides one-stop-shopping, offering
its complete product portfolio of resistors, capacitors, wireless
and circuit protection components to meet the diverse requirements
of customers. Additional information about Yageo can be found at
http://www.yageo.com. About KEMET
KEMET’s common stock is listed on the NYSE under the ticker
symbol “KEM” (NYSE: KEM). At the Investor Relations section of our
web site at http://www.KEMET.com/IR, users may subscribe to KEMET
news releases and find additional information about our Company.
KEMET offers our customers the broadest selection of capacitor
technologies in the industry, along with an expanding range of
sensors, actuators and electromagnetic compatibility solutions.
KEMET operates manufacturing facilities, sales and distribution
centers around the world. Additional information about KEMET can be
found at http://www.KEMET.com.
Cautionary Statement on Forward-Looking
Statements
Certain statements included herein contain forward-looking
statements within the meaning of federal securities laws about
KEMET’s financial condition and results of operations that are
based on management’s current expectations, estimates and
projections about the markets, in which KEMET operates, as well as
management’s beliefs and assumptions. Words such as “expects,”
“anticipates,” “believes,” “estimates” or other similar expressions
and future or conditional verbs such as “will,” “should,” “would,”
and “could” are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and
assumptions, which are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed
or forecasted in, or implied by, such forward-looking
statements.
This communication includes forward-looking statements relating
to the proposed transaction between KEMET and Yageo, including
financial estimates and statements as to the expected timing,
completion and effects of the proposed transaction. These estimates
and statements are subject to risks and uncertainties, and actual
results might differ materially. Such estimates and statements
include, but are not limited to, statements about the benefits of
the proposed transaction, including future financial and operating
results, the combined company’s plans, expectations and intentions,
and other statements that are not historical facts. Such statements
are based upon the current beliefs and expectations of the
management of KEMET and Yageo and are subject to significant risks
and uncertainties outside of our control. Actual results could
differ materially based on factors including, but not limited to:
(i) the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement; (ii)
the risk that KEMET stockholders may not approve the proposed
transaction; (iii) the risk that Yageo stockholders may not approve
the proposed transaction (if approval by Yageo’s stockholders is
required by law); (iv) the risk that the necessary regulatory
approvals may not be obtained or may be obtained subject to
conditions that are not anticipated; (v) inability to complete the
proposed transaction because, among other reasons, conditions to
the closing of the proposed transaction may not be satisfied or
waived; (vi) uncertainty as to the timing of completion of the
proposed transaction; (vii) potential adverse effects or
changes to relationships with customers, employees, suppliers or
other parties resulting from the announcement or completion of the
proposed transaction; (viii) potential litigation relating to the
proposed transaction that could be instituted against KEMET, Yageo
or their respective directors and officers, including the effects
of any outcomes related thereto; or (ix) possible disruptions from
the proposed transaction that could harm KEMET’s or Yageo’s
business, including current plans and operations.
Discussions of additional risks and uncertainties are contained
in KEMET’s filings with the United States Securities and Exchange
Commission (the “SEC”). Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect
management’s judgment only as of the date hereof. KEMET and Yageo
undertake no obligation to update publicly any of these
forward-looking statements to reflect new information, future
events or otherwise.
Additional Information and Where to Find It
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed
transaction, KEMET will file with the SEC a proxy statement (and
related white proxy card) on Schedule 14A and may file or furnish
other documents with the SEC regarding the proposed transaction.
This press release is not a substitute for the proxy statement or
any other document which KEMET may file with the SEC. INVESTORS IN
AND SECURITY HOLDERS OF KEMET ARE URGED TO READ THE PROXY STATEMENT
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR FURNISHED OR
WILL BE FILED OR WILL BE FURNISHED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN
THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the proxy
statement (when available) and other documents filed with or
furnished to the SEC by KEMET through the web site maintained by
the SEC at www.sec.gov or by contacting the investor relations
department of KEMET.
Participants in the Solicitation
KEMET and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from KEMET’s
stockholders in connection with the proposed transaction.
Information regarding KEMET’s directors and executive officers,
including a description of their direct interests, by security
holdings or otherwise, is contained in KEMET’s 2019 annual proxy
statement filed with the SEC on June 18, 2019, and in the related
amendment filed on July 1, 2019. A more complete description
will be available in the proxy statement on Schedule 14A to be
filed regarding the proposed transaction. These documents can
be obtained free of charge from the sources indicated above.
1 Yageo: For the last 12 months as of September
2019 - $1.56 billion KEMET: For the last 12 months as
of September 2019 - $1.38 billion
Contact: |
Yageo Corporation:Andy Sung Spokesman and Investor Relations
Manager Andy.Sung@yageo.com |
KEMET Corporation:Gregory C. ThompsonExecutive Vice President
andChief Financial OfficerGregThompson@KEMET.com |
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