Jabil Announces Memorandum of Agreement with Compaq
27 February 2002
St. Petersburg, FL
Jabil Circuit, Inc. (NYSE: JBL) announced today an agreement in principle to acquire the Ayr, Scotland facility of Compaq Computer Corporation (NYSE: CPQ).
Subject to employee consultation and execution of definitive contracts and agreements, Jabil will acquire the building and other assets that comprise the facility, including equipment required to build, test, handle and ship the server printed circuit board assemblies currently assembled in Ayr. Pending successful completion of the agreement, plans call for Compaq and Jabil to enter into a three-year supply agreement designating Jabil as the sole and exclusive manufacturer of current Ayr manufactured server product sub-assemblies and future products. Jabil will also be designated a "strategic global supplier" to Compaq.
Under the proposed terms of the deal, approximately 240 Compaq employees in Ayr will become employees of Jabil Circuit.
"We are pleased to have this opportunity to support the Compaq server product line," said Tim Main, Jabil President and CEO. "Jabil's strategic objective to continue to broaden our participation in the high-end server sector and to boost our European profile is well served with this agreement. We look forward to welcoming aboard a highly skilled and talented Compaq workforce."
Christina Hanger, vice president, Enterprise Supply Chain, Compaq Computer Corporation, said: "This agreement furthers Compaq's strategy to streamline manufacturing and focus resources on our core strengths of system integration and complex configuration. It also enables us to consolidate our European systems manufacturing onto one site, in Erskine, Scotland."
"Jabil Circuit is an ideal strategic supplier based on its expertise in complex, high-end board assemblies, dedicated workcell manufacturing and supply chain management. We are confident that Jabil will offer our transferring employees the opportunity to join a strong business focused specifically on growing its manufacturing operations."
About Jabil
Jabil Circuit, Inc. is an electronic manufacturer of circuit board assemblies and systems for global electronics product companies. Jabil offers manufacturing and assembly services, including circuit design, board design from schematic, prototype assembly, volume board assembly and system assembly services. The company operates manufacturing facilities in 22 locations in 12 countries around the world. More information on Jabil can be found on its website: www.jabil.com.
About Compaq
Founded in 1982, Compaq Computer Corporation is a leading global provider of information technology products, services and solutions for enterprise customers. Information on Compaq and its products and services is available at http://www.compaq.com.
Compaq and the Compaq logo are trademarks of Compaq Information Technologies Group, L.P. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies. This document contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the Hewlett-Packard/Compaq merger does not close or that the companies may be required to modify aspects of the transaction to achieve regulatory approval or market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; that Compaq and Hewlett-Packard are unable to transition customers, successfully execute their integration strategies, or achieve planned synergies; other risks that are described from time to time in Compaq and Hewlett-Packard's Securities and Exchange Commission reports (including but not limited to Compaq's annual report on Form 10-K for the year ended December 31, 2001, Hewlett-Packard's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, and subsequently filed reports). If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, Compaq's results could differ materially from Compaq's expectations in these statements. Compaq assumes no obligation and does not intend to update these forward-looking statements.
This news release contains various forward-looking statements, including those regarding Jabil's anticipated negotiation, documentation and consummation of the transaction described below and the potential benefits to Jabil from this transaction. These statements are based on Jabil's current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include: the ability to negotiate and enter into acceptable binding, definitive documentation setting forth the specific terms of the transaction described above; the length and severity of the current economic downturn and Jabil's ability to manage customer demand through the downturn; fluctuations in operating results; changes in technology; competition; managing rapid growth; managing rapid declines in customer demand; managing the integration of businesses we acquire; risks associated with international sales and operations; retaining key personnel; our dependence on a limited number of customers; the consolidation of our customer base; business and competitive factors generally affecting the electronic manufacturing services industry, our customers and our business. There are also other risk factors that we may not have currently identified or quantified; and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2001, any subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.