In a global linkage of contract manufacturers, Flextronics International Ltd. agreed Oct. 19 to acquire Neutronics Electronic Industries Holding AG.
The transaction would involve an exchange of 2,806,000 Flextronics shares for 92 percent of Neutronics' outstanding shares. The deal was valued at $126.4 million Oct. 17.
Closing is scheduled before Nov. 30 with plans to continue operations under both names.
Neutronics employs 3,500 and has facilities at its headquarters location in Althofen, Austria, and three sites in Hungary in Sarvar, Tab and Zalaegerszeg. The firm provides electronics assembly services and operates 45 Arburg, Klockner, Engel, Cincinnati Milacron, Windsor and MIR injection molding machines with clamping forces of 20-1,050 tons. Each is equipped with automatic-removal robotics.
A release said the molding operations ``will complement Flextronics' plastics offerings in China and Mexico.''
Neutronics is owned by Malaysian businessman S.L. Hui, subsidiaries of Netherlands-based Philips Electronics NV and Neutronics management. In a quick reverse, the owners canceled a proposed initial public offering of stock set for Oct. 20.
Hui and Philips formed Neutronics in July 1994 as a contract- manufacturing joint venture. Philips plans to remain a customer of, and supplier to, the combined company.
Under the agreement, Hui would become a Flextronics director, and Humphrey Porter, Neutronics chairman and chief executive officer, would serve on a Flextronics management committee with responsibility for Central European operations.
A predecessor firm entered the contract manufacturing business in Singapore in 1982. The current firm was incorporated in Singapore in 1990, recapitalized in 1993 and has completed numerous acquisitions including the March purchase of two Karlskrona, Sweden, facilities of Ericsson Business Networks AB for about $82.4 million.
Flextronics recorded profit of $7.5 million on sales of $490.6 million for the 1997 fiscal year ending March 31. Sales were $100.8 million in fiscal 1993.
Flextronics' manufacturing and engineering operations occupy more than 1 million square feet in Singapore, China, Malaysia, the United States, the United Kingdom and Sweden. The firm employed 5,518 as of May 31.
Flextronics' principal U.S. site for manufacturing operations and corporate functions is San Jose, Calif., with design and prototype services also located in Westford, Mass., and Los Gatos, Calif.
Expansion continues, although the company allocated $5.9 million for plant closings in fiscal 1997.
In San Jose, Flextronics completed construction in May of a 73,000-square-foot facility for printed-circuit-board assembly and leased a 65,000-square-foot product introduction facility.
A 32-acre ``manufacturing campus'' in Guadalajara, Mexico, holds a new 101,000-square-foot facility that has three injection molding presses. Construction has begun on three 40,000-square-foot buildings there.
Flextronics is adding 224,000 square feet in Doumen, China, bringing its campus there to 393,000 square feet. Completion by mid-1998 will add capacity to fabricate and assemble printed circuit boards and manufacture injection molded parts for electronics.
Fico Investment Holding Ltd. will occupy a ground floor at the Doumen site. Flextronics owns 40 percent of Fico, a producer of injection molded plastic parts for Asian electronics companies.
As of June 30, the largest holders of Flextronics stock were funds and partnerships affiliated with Baron Capital Management Inc. of New York, at 14.05 percent, and Sequoia Capital of Menlo Park, Calif., at 6.92 percent. Flextronics' stock has traded on the Nasdaq National Market since 1994.