Manufacturing giant Sanmina-SCI has agreed to buy Ottawa-based competitor BreconRidge Corp. for up to $53 million.
“This acquisition strengthens both our position and our customer base in radio-frequency/microwave and micro/opto-electronic technologies,” said Sanmina-SCI chief executive Jure Sola in a statement. “Upon completion of this transaction, Sanmina-SCI will be the leading electronics manufacturing services provider for these rapidly expanding leading-edge technologies.”
San Jose, Calif.-based Sanmina-SCI said in a release accompanying its second-quarter results that it has executed a definitive agreement to acquire BreconRidge, a nine-year-old, privately held contract manufacturing firm that started its life as a spinoff of Mitel Networks.
The deal, which is expected to close in the next 30 days, will see Sanmina-SCI paying up to $53 million, including equity and the assumption of certain liabilities.
The U.S. firm pointed out that BreconRidge’s current revenue run rate is about $45 million per quarter, and it said it expects to increase that figure over the next 12 months to between $250 million and $300 million per year.
Sanmina-SCI earned total revenues of $5.18 billion in its fiscal 2009 year, down from $7.2 billion a year earlier, although its full-year loss of $136.2 million or $1.65 per share was also narrower than its loss of $511.3 million or $5.78 per share a year earlier.
In its second-quarter earnings, it said revenues rose 27.8 per cent to $1.53 billion, and it managed to improve its bottom line to record profits of $10 million or 12 cents per share, from a loss of $38 million or 45 cents per share a year earlier.
Sanmina-SCI said it was particularly interested in the BreconRidge team’s expertise in advanced broadband technologies that offer speeds of more than 100 gigabits per second, and in wireless, radar and satellite applications.
The firm also highlighted BreconRidge’s manufacturing operations in Canada and China as a key factor for the acquisitions.
BreconRidge had 500 local employees at last count, according to the Ottawa Technology Magazine, while Sanmina-SCI had about 75 Ottawa workers.
Ottawa Business Journal