Eimo Oyj could have a new owner by the end of September.
Key minority owners of the Lahti, Finland-based injection molder are negotiating to sell their 24 percent portion, the company announced in a public filing. If that deal works out, the buyer is committed to buy the remainder of the company.
The filing did not identify the buyer. Industry speculation has included mention of contract manufacturer Flextronics International Ltd. In the filing, Eimo owners said they anticipate significant industry consolidation with larger suppliers absorbing smaller firms.
Eimo has had a large U.S. presence since its 2001 purchase of Triple S Plastics Inc. of Portage, Mich.
Four members of the founding Paananen family are in advanced discussions to sell each of their shares for 0.96 euro ($1.09) in cash, according to the filing. The buyers would simultaneously launch a public bid for Eimo's remaining shares at no less than the family's agreed price. The proposal values Eimo at 64 million euros ($72 million).
Eimo said a deal might be reached during the quarter ending Sept. 30. Eimo scheduled a special meeting of shareholders on Aug. 29 to deal with changes in the company's governing articles.
Eimo primarily supplies the mobile communications and health-care industries.
Some telecommunications customers ``are moving their purchases toward large, global, multicapable solutions providers,'' according to Eimo's filing.
A financial report issued Aug. 6 hints at the problems: For the quarter ended June 30, Eimo reported a loss of 8.2 million euros ($9.3 million) on sales of 54.9 million euros ($62.8 million). The loss included one-time write-downs and costs of 7.8 million euros ($8.9 million).
Last year's comparable quarter had a loss of 4.4 million euros ($4.3 million) on sales of 53.6 million euros ($53.1 million).
Recently, Eimo closed operations in Helmond, the Netherlands, and Battle Creek, Mich., in an effort to improve efficiency. Eimo moved equipment and production to other locations.
Eimo said its operational performance in the Americas improved slightly toward the end of the recent quarter ``with Europe starting to slow down a bit.''
Geographically, 57 percent of the quarter's sales came from Eimo customers in Europe with 39 percent from those in the Americas and 4 percent from those in Asia. Work in telecommunications and electronics accounted for 80 percent of the sales.
Eimo forecasts 2003 sales lower than its 2002 report of 252 million euros ($264 million) ``mainly due to some loss of the market share gained in 2002, discontinued production in Battle Creek and the weakness in the U.S. dollar.''