(WebFG News) - Cable assemblies provider Volex announced the proposed acquisition of MC Electronics - a North-American based manufacturer of customised complex medical and industrial cables, wire harnesses and electro-mechanical assemblies for medical and industrial applications - on Thursday.
The AIM-traded firm said MC was a portfolio company managed by Nova Capital Management.
MC, which has operations in California and Juarez, Mexico, produces customised cables, wire harnesses and electro-mechanical assemblies for more than 40 customers in the North American market.
For the year ended 28 October, it reported unaudited revenues of $19.1m and a pre-exceptional operating loss of $0.2m.
Volex proposed to acquire all of the issued and outstanding units of MC and all of the outstanding shareholder indebtedness owed by MC for a maximum consideration of 3.5 million new ordinary shares
of 25p each in the Company.
Of that, three million would be issued on completion and the balance issued by the end of 2018, subject to MC achieving certain revenue targets for the year ending 3 November.
The company said it was also exploring a number of acquisition opportunities and financing alternatives in line with its strategy of consolidating the highly fragmented cable assembly industry.
In particular, Volex said it was in "advanced negotiations" with another significant acquisition target.
"This acquisition represents an important first step in expanding Volex's presence in the cable assembly business," said Volex executive chairman Nat Rothschild.
"MC brings new customer relationships to Volex and also the opportunity to integrate our Mexican operations over time, to improve our profitability and competitiveness."
The transaction remained conditional upon admission to trading on AIM of the three million new ordinary shares to be issued on completion, and was also subject to certain other customary closing conditions.
A further announcement would be issued when those conditions have been satisfied, Volex said.