TTM Technologies, a globally renowned circuit board manufacturer, has reportedly announced the completion of its divestiture in four of its production plants that make up significantly all assets of the company’s Mobility business unit.
AKMMeadville Electronics, the company acquiring these four manufacturing plants, is a Chinese group of companies made up of Meizhi Investment, AKM Electronics Industrial, Xiamen Semiconductor Investment, as well as Anmei Ventures Equity Investment Partnership.
The complete transaction is planned as the TTM’s Mobility business unit sale, comprising of its four China production plants on a cash-free, debt-free basis for $550 million in cash, which is required to adhere to working capital adjustments during closing. The net proceeds obtained from the divestiture of the four production units are likely to be used to invest in industry expansion or reduce the company debt.
This transaction is a very crucial step for TTM in enhancing the company’s stated strategy of boosting its focus on developing industries having long product cycles like automotive, industrial, medical, instrumentation, networking/communications, and defense & aerospace that extensively use the company’s industry-leading differentiated solutions and engagement capabilities, while further reducing its focus on consumer-oriented, seasonal industries like cellular.
TTM Technologies, CEO, Tom Edman, stated that the company is thrilled to announce the transaction’s completion even as the economic and health risks to the global economy due to COVID-19 have increased in the past few months. The company hopes that the leftover TTM business would be less seasonal while helping the company delivers to longer cycle industries that fit its strategic direction.
Edman further added that the company is also thrilled about its new development opportunities across cloud data centers, 5G infrastructure, growing automotive electronic content, and aerospace & defense electronics sector. Ultimately, the cash obtained from this transaction would further consolidate the company’s balance sheet in a time of economic uncertainty and also offer capital capacity for growth investments in the future.