Kitron has entered into an agreement with API Technologies Corp. to gain its EMS division in the United States. The purchase marks a substantial strengthening of Kitron’s position in the US market.
“The transaction will significantly strengthen our position in the US market, particularly within the defence industry. Important customers have wanted us to expand our presence in the US, and we think this is a great opportunity to do so,” said Peter Nilsson, CEO of Kitron.
The operations of the EMS division are highly subservient to Kitron’s existing operations and are expected to provide added value to current operations, in particular in the United States. The division’s main highlight is on defense, aerospace, medical/industrial, and communications/consumer, and it is well aligned with Kitron’s overall approach. The business is located in Windber, Pennsylvania, close to Kitron’s current US facility in Johnstown, Pennsylvania, with roughly 100 employees operating a total of six production lines and a facility of around 10,000 square meters. Total profits in 2017 amounted to around USD $30 million.
“ We have studied this business properly over time and see awesome potential for adding the API EMS division with the Kitron group, having EMS as its core business. It has a very intriguing customer base, a promising order book and a highly skilled staff. We expect the division to generate an operating profit on a stand-alone basis going forward, and see substantial potential for further profitability improvements by joining forces with Kitron and increasing utilization,” Mr Nilsson said.
The purchase price is USD 15.9 million in cash, even to net asset value, which is supported through existing bank arrangements. Closing is expected to take place in the first quarter of 2019, subject to necessary governmental approvals. Kitron expects the transaction to be earnings neutral in 2019 and earnings enhancing in 2020 and beyond.

This article is originally posted on Tronserve.com