Eimo Oyj has identified its potential new owner: Tu-cheng, Taiwan-based electronics connector, computer housing and cable assembly producer Foxconn Electronics Inc.
Foxconn, part of the Taiwanese Hon Hai Precision Industry Co. Ltd., launched a cash offer to buy around 70 percent of Eimo's shares, valuing the Lahti, Finland-based injection molder at around 70 million euros ($76 million). Eimo's directors agreed Aug. 21 to back the Foxconn bid.
Last month Eimo said four members of its founding Paananen family were in advanced talks to sell the firm, but at the time it did not identify the buyer.
Eimo, which molds precision components mainly for the mobile communications and health-care sectors, has injection molding facilities in Europe, Asia and the Americas, including former Triple S Plastics Inc. plants in Fort Worth, Texas, and Vicksburg, Mich.
For the first half of 2003, Eimo reported an operating loss of 5.8 million euros ($6.2 million) on sales of 108 million euros ($116 million). Eimo said it faces a strong global trend among its core telecommunications customers that are moving business to large, global suppliers offering a wider variety of services, from design through supply chain management.
``The fact that Eimo is a relatively tightly focused plastics solutions provider, with gaps in its global reach, will have implications on Eimo's position in the marketplace and on Eimo's profitability,'' it warned. The firm said it expects 2004 sales to drop from current levels.
Foxconn claims to be the largest molder of connectors for use in personal computers in Taiwan, and a leading international manufacturer of connectors and cable assemblies. The company also molds enclosures, primarily for desktop PCs and PC servers.
Part of its strategy is to expand capacity to obtain economy of scale and to achieve a position as a global player serving the network communication and consumer electronics sectors.