By Valerie Coffey
Amphenol Corporation (Wallingford, CT) announc-ed an agreement to acquire Teradyne’s Connection Systems (Nashua, NH) for approximately $390 million in cash, subject to a post closing working capital adjustment. The sale, which will boost Amphenol to the position of the third largest connector manufacturer in the world after Tyco (Harrisburg, PA) and Molex (Lisle, IL), is expected to close by the end of November. Amphenol was previously ranked as the fifth largest connector manufacturer worldwide by industry analysts at Bishop & Associates. The acquisition relegates FCI (Etters, PA) and Delphi Connection Systems to the fourth and fifth positions, respectively.
Teradyne Connection Systems (TCS) manufactures high-speed, high-density, printed-circuit-board interconnect products, and has annual sales of approximately $380 million in the data communications, storage, server, wireless infrastructure, and industrial markets. TCS has facilities in North America, Europe, and Asia, employing approximately 2,250 people worldwide.
“We are extremely pleased to add TCS to the Amphenol family,” said Martin H. Loeffler, Amphenol’s chairman and CEO. “TCS has enormous technological capabilities and is the leader in the development of high-speed, high-density board-level interconnect products. The addition of TCS is entirely complementary to Amphenol’s product offering and will significantly enhance our already strong position in the communication and information technology markets. We will now provide a complete and integrated interconnect solution to these markets, similar to what we have successfully achieved in other markets.
“In addition, we are excited about the possibilities created by the combination of Amphenol’s strong operating discipline and TCS’s industry-leading technology, and we look forward to working in partnership with TCS’s experienced management team.
“We plan to finance the acquisition through an increase in our revolving credit facility. Consistent with our acquisition strategy and assuming a continuation of current economic conditions, we expect the TCS acquisition to be accretive to earnings per share in the first year post acquisition.”
Marketing communications manager at TCS, Cathy Palmer, said, “We are very excited to be part of a parent solely focused on interconnect who has scale capabilities in terms of manufacturing experience, which can help us to become a better competitor and supplier. There is no product overlap, so the fit with the Amphenol family will enable us to remain a stand-alone product family.”
No layoffs or relocation of facilities are expected as a result of the sale, according to Palmer: “There is no over overlap in the sales force, the marketing team, the product family, or in our customer service.” When the company sign changes toward the end of November, the new company will be known as Amphenol TCS.
