Methode Electronics, Inc. (NYSE:MEI) (“Methode” or
“the Company”), a global developer of custom engineered and
application-specific products and solutions, announced that it has
completed the acquisition of Grakon Parent, Inc. (“Grakon”),
previously announced on August 20, 2018. Grakon is a global
leader in the design, development and manufacture of advanced
lighting systems, controls and components for premier OEM
manufacturers in the heavy truck, bus, rail, electric vehicle and
power sports markets. Methode funded the total consideration of
$420 million with a combination of cash on hand and proceeds from
the Company’s amended credit facility. Excluding pre-tax costs
related to the transaction and inclusive of estimated amortization
and interest expense, Methode expects the acquisition to be
accretive to earnings in its current fiscal year ending April 27,
2019.
Methode’s President and Chief Executive Officer, Donald W. Duda,
said, “Grakon’s manufacturing capabilities and products will foster
additional innovation within our companies, driving incremental
revenue, EPS and cash flow growth and providing strong returns for
our shareholders. I am delighted to officially welcome the
employees of Grakon to Methode and look forward to the growth we
can achieve as one company.”
Grakon has delivered interior lighting expertise, as well as
exterior lighting systems that enhance vehicle styling, improve
safety and eliminate equipment downtime to the commercial vehicle
industry for over 40 years. As a preferred supplier among its OEM
customers in Asia, Australia, Europe, and the Americas, Grakon’s
top 10 commercial vehicle customers have an average tenure of over
19 years. With three facilities in North America, two in Europe and
two in Asia, Grakon has over 1,200 employees, including over 100
engineers.
Foros acted as financial advisor to Methode. Wachtell, Lipton,
Rosen & Katz served as Methode’s outside legal counsel.
Baird acted as financial advisor to Grakon. Kirkland &
Ellis LLP served as Grakon’s outside legal counsel.
About MethodeMethode
(NYSE:MEI) is a global developer of custom engineered and
application specific products and solutions with manufacturing,
design and testing facilities in Belgium, Canada, China, Egypt,
Germany, India, Italy, Lebanon, Malta, Mexico, Singapore,
Switzerland, the United Kingdom and the United States. We design,
manufacture and market devices employing electrical, electronic,
wireless, safety radio remote control, sensing and optical
technologies to control and convey signals through sensors,
interconnections and controls. Our business is managed on a segment
basis, with those segments being Automotive, Interface, Power
Products and Other. Our components are in the primary end markets
of the automobile, computer, information processing and networking
equipment, voice and data communication systems, consumer
electronics, appliances, aerospace vehicles and industrial
equipment industries. Further information can be found on Methode's
website www.methode.com.
Forward-Looking StatementsThis press release
contains certain forward-looking statements, which reflect
management's expectations regarding future events and operating
performance and speak only as of the date hereof. These
forward-looking statements are subject to the safe harbor
protection provided under the securities laws. Methode undertakes
no duty to update any forward-looking statement to conform the
statement to actual results or changes in Methode's expectations on
a quarterly basis or otherwise. The forward-looking statements in
this press release involve a number of risks and uncertainties. The
factors that could cause actual results to differ materially from
our expectations are detailed in Methode's filings with the
Securities and Exchange Commission, such as our annual and
quarterly reports. Such factors may include, without limitation,
the following: (1) dependence on a small number of large customers,
including two large automotive customers; (2) dependence on the
automotive, appliance, computer and communications industries; (3)
investment in programs prior to the recognition of revenue; (4)
timing, quality and cost of new program launches; (5) uncertainties
surrounding the success of the Grakon acquisition; (6) ability to
withstand price pressure, including pricing reductions; (7)
currency fluctuations; (8) customary risks related to
conducting global operations; (9) changes in U.S. trade policy;
(10) ability to successfully market and sell Dabir Surfaces; (11)
dependence on our supply chain; (12) income tax rate fluctuations;
(13) dependence on the availability and price of raw materials;
(14) fluctuations in our gross margins; (15) ability to withstand
business interruptions; (16) ability to keep pace with rapid
technological changes; (17) breach of our information technology
systems; (18) ability to avoid design or manufacturing defects;
(19) ability to compete effectively; (20) ability to protect our
intellectual property; (21) successfully benefit from acquisitions
and divestitures; (22) recognition of goodwill impairment charges;
(23) success of Pacific Insight and Procoplast and/or our ability
to implement and profit from new applications of the acquired
technology; (24) significant adjustments to expense based on the
probability of meeting certain performance levels in our long-term
incentive plan; and (25) costs and expenses due to regulations
regarding conflict minerals.
Contacts for Methode: Kristine WalczakVice
President, Corporate Communicationskwalczak@methode.com
Steve CarrDresner Corporate
Services312-780-7211scarr@dresnerco.com
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