Jabil Announces Agreement to Acquire Electronics Manufacturing Business from Varian, Inc.
7 February 2005
St. Petersburg, FL
Jabil Circuit, Inc. (NYSE: JBL) announced today its intention to acquire the business and assets of Varian Electronics Manufacturing (VEM), the manufacturing business of Varian, Inc. (Nasdaq: VARI). The VEM business derives 85% of its revenues from external customers in the medical, communications, industrial and aerospace industries.
"Varian's electronics manufacturing business specializes in high-mix, high-complexity products in the medical, aerospace, communications and scientific instrument markets. This acquisition expands our commitment and delivers on our promise to provide the market leading solution to customers in these highly specialized and rapidly growing markets," said Timothy L. Main, President and CEO of Jabil. "Customer requirements in these markets are truly unique and this acquisition will give us greater depth and competency to serve customers and expand our business in these sectors."
The Varian Electronics Manufacturing business has a targeted competency in high-mix and high-complexity electronics manufacturing. Operating as an independent division of Varian, Inc., VEM serves the medical, communications, industrial and aerospace industries, primarily serving the high-mix, high-complexity manufacturing markets. Three Varian sites, a 200,000 square-foot operation in Arizona and two small leased sites in California have full EMS capabilities and provide services for products including patient monitoring, digital x-ray, infusion pumps, intelligent transportation, scientific instruments, telephony, satellite modems, avionics instrumentation, flight electronics, simulators and RADAR equipment.
"We are excited to be able to offer our customers the opportunity to grow and take their business to the next level utilizing Jabil's full suite of value-add services, anywhere in the world. Jabil and Varian have the same vision and the same goal: to offer customers great services in the right locations," said C. Wilson Rudd, Vice President, Electronics Manufacturing, Varian, Inc. "The combination with Jabil also affords long-term growth and career opportunities for VEM employees to gain global manufacturing experience."
Completion of the transaction, which is subject to regulatory clearance and customary conditions, is expected to take place in early March. The purchase price for the acquisition is approximately $195 million, subject to certain working capital adjustments. The company said the transaction would be accretive to earnings during fiscal year 2005 and that management would provide specific guidance during the second quarter earnings announcement on March 17th.
"Varian's competency combined with Jabil's global footprint, procurement leverage, services, capital and long term commitment to the business will result in a powerful and satisfying solution for customers. We look forward to improving and expanding our business in this area," said Main.
Conference Call
Jabil will conduct a teleconference to discuss the transaction at 10:00 am EST on Monday, February 7, 2005.
Participant Dial-In Number(s): US/Canada: (800) 837-7537
International/Local Dial-In: (706) 634-1268
Conference ID # 3925678
About Jabil
Jabil is an electronic solutions company providing comprehensive electronics design and product management services to global electronics and technology companies. Jabil helps bring electronics products to the market faster and more cost effectively by providing complete electronic product supply chain management around the world. With more than 40,000 employees and facilities in 19 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, "JBL". Further information is available on the company's website: jabil.com.
This news release contains forward-looking statements, including those regarding the anticipated outlook for our business, our currently estimated fiscal year 2005 revenues and earnings results and our long-term outlook for our company, our industry and our customers. These statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: our ability to consummate the transactions described; our ability to successfully integrate the operations acquired from Varian, Inc..; and retain the customers of the acquired business; changes in technology; competition; anticipated growth for the acquired business and us and our industry may not occur; managing rapid growth; managing any rapid declines in customer demand that may occur; our ability to successfully consummate the described acquisition and other acquisitions; our ability to provide quality services; our ability to service growing markets; 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; other 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, 2004, 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.