Celestica Inc, the Toronto, Canada-based provider of computer and electronic manufacturing services, has agreed to acquire International Manufacturing Services Inc for $160m. One of the main reasons behind the acquisition was Celestica’s desire to expand into Asia, and IMS offers it an immediate presence in that region. Of its roughly 3,600 employees, about 3,400 are based in Asia, as the company operates facilities in China, Thailand and Hong Kong. Under terms of the deal, each outstanding share of IMS stock will be converted into 0.4 voting shares of Celestica stock or, at the election of shareholders, $7 in cash – representing a 36.6% premium over Friday’s closing price. Celestica still gets IMS as somewhat of a bargain price, as its shares have been declining steadily since May, when they traded at about $10, and have recently fallen as low as $2. Two weeks ago, the company warned that it would see a break even or money-losing second quarter, when analysts were expecting a profit of $0.15 per share. IMS, which saw total revenue of $312.5m in its last fiscal year, will become a wholly-owned subsidiary of Celestica. Certain institutional investors, which control roughly 45% of IMS stock, have already committed to vote in favor of the deal. The transaction will be accounted for by Celestica as a purchase and will result in a yet-to-be-determined charge.
