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Manufacturing/Packaging??

Plexus, Kontron enter manufacturing deal

Posted: 06 Jan 2012 ?? ?Print Version ?Bookmark and Share

Keywords:manufacturing facility? asset transaction?

Plexus Corp. and Kontron AG have are planning to enter into a strategic manufacturing arrangement. The two companies have signed an asset transaction term sheet wherein assets of Kontron Design Manufacturing Services (KDMS), a wholly owned subsidiary of Kontron AG based in Penang, Malaysia, will be transferred to Plexus. The purchase price of the asset transaction is $30-35 million.

"We believe this strategic arrangement will expand and strengthen our existing relationship with Kontron, capitalizing on our demonstrated leadership in mid-to-low volume, higher complexity manufacturing programs," said Dean Foate, president and CEO of Plexus.

The manufacturing deal will also result in an increase of flexible working capital for Kontron and allow the company to focus primarily on its core capabilities.

Expanding on their existing strategic production alliance, the agreement also allows Kontron to benefit from the purchasing advantage of Plexus as the company plans to procure, in addition to existing business, around $100 million worth of modules per year to help meet customer demand.

Ulrich Gehrmann, CEO of Kontron AG, commented, "The agreement enables Kontron to focus on our core competencies in providing superior engineering services. By expanding our relationship with Plexus, Kontron ensures its continued commitment to best-in-class quality products. The result is an increase of efficiency in operational expenses and working capital, positioning Kontron for a larger market penetration of higher gross margin design wins."





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