Published: October 06, 2009
Viasystems and Merix Agree to Merge
ST. LOUIS & BEAVERTON, Ore. - (BUSINESS WIRE) - Viasystems Group, Inc. and Merix Corporation (NASDAQ: MERX) today
announced they have entered into a definitive agreement to merge their
businesses.
When completed, the merger will result in the largest publicly traded
printed circuit board (PCB) manufacturer by revenue in the United
States. Viasystems and Merix have complementary core competencies that
will enable the combined organization to provide customers with a
complete spectrum of services and technology for both quick-turn
prototyping and high volume PCB manufacturing in Asia and North America.
Major Terms of the Agreement
-
Each Merix share will be converted into approximately 0.11 newly
issued shares of Viasystems, subject to adjustment, which will be
publicly traded on the NASDAQ upon completion of the transaction.
-
Approximately 98 percent of holders of Merix $70 million convertible
senior subordinated notes due 2013 have agreed to enter into an
exchange agreement whereby their notes will be exchanged for
approximately 1.4 million newly issued Viasystems shares plus a total
cash payment of approximately $35 million.
-
Following the merger transaction and note exchange, approximately 20
million newly issued Viasystems shares will be outstanding.
-
Existing Viasystems shareholders will own approximately 80.5 percent
of the combined company, existing Merix shareholders will own
approximately 12.5 percent and Merix convertible note holders will own
approximately 7.0 percent.
Based on the results for the twelve months ended June 30, 2009 for
Viasystems and August 29, 2009 for Merix, on a pro forma basis, the
combined operation would have had approximately $840 million of revenue.
Pro forma adjusted EBITDA for that period would have been approximately
$68 million. Adjusted EBITDA is defined as operating income (loss)
adjusted to exclude charges for depreciation, amortization, stock-based
compensation, and restructuring and impairment costs. The companies
expect annual cost synergies of approximately $20 million can be
achieved through steps initiated within the first 60 days post
completion of the transaction.
Following the merger transaction, the combined company will have
approximately 13,000 employees and manufacturing capacity exceeding 4.3
million square feet in China and 375,000 square feet in North America.
"Through this merger, we're creating a world-class leader in PCB and
related electro-mechanical solutions with complementary market segments,
customers and manufacturing capabilities," said Viasystems Chief
Executive Officer David Sindelar. "The net result will be best-in-class
PCB manufacturing on a global basis, combining Viasystems' high volume
and quick-turn capabilities in China with Merix' quick turn and
prototyping capabilities in the US. These assets along with Merix' Asia
factories will substantially increase our business scale and expand our
customer base."
"We believe this is an excellent strategic fit and offers stakeholders
tremendous value," said Merix Chief Executive Officer, Michael Burger.
"Viasystems is an ideal partner that accelerates and adds scale to the
value proposition that Merix has been building for several years. This
compelling opportunity for value creation makes the combination very
attractive to our customers, employees and stakeholders."
Benefits of the Transaction
-
The merger creates a large and diversified customer base - among the
top ten customers of both companies, only three overlap.
-
Merix' facilities will offer Viasystems' 125 customers complex PCB
production in the U.S., including quick-turn and prototyping
capabilities not offered today.
-
Merix' facilities and capabilities in the U.S. will provide Viasystems
the opportunity to access the growing Aerospace and Defense industry.
-
Viasystems provides Merix' 800 customers with expanded scale of
Asian-based high-volume, quick-turn and HDI printed circuit board
manufacturing capabilities, as well as new electro-mechanical
solutions.
-
The combination will benefit from complementary technologies, a strong
combined management team, and a shared focus on reliability and
quality, resulting in a stronger company that is more competitive in
the marketplace.
"These are two successful, innovative organizations with one mission: To
meet the rapidly changing needs of our customers," added Mr. Sindelar.
"By leveraging the diversified operations and employee skill sets of
both organizations, this combined company is well positioned in a
recovering industry. We're confident in our plan to integrate our
businesses and create tremendous value, providing opportunities for
employees, customers and shareholders."
Viasystems Equity Registration
Prior to completing the merger, Viasystems intends to register the
shares with the U.S. Securities and Exchange Commission. When the
registration becomes effective and the merger is approved by Merix
shareholders, the new Viasystems shares are expected to publicly trade
on the NASDAQ in place of existing Merix shares. Significant note and
equity holders have agreed to certain lock-up restrictions after trading
of the new shares begins. Completion of the transaction is expected by
the end of calendar year 2009.
Financing and Capital Structure
The cash consideration will be financed by Viasystems' existing cash on
hand. Concurrent with the closing of the merger transaction, Wells
Wachovia has committed to enter into a new $75 million line of credit
with Viasystems. The combined company will have a strong balance sheet
with access to more than $100 million in credit lines, a cash balance of
approximately $40 million after the transaction is completed, and $215
million of outstanding debt (a reduction of approximately $80 million).
Following the close of the transaction, Viasystems' Board of Directors
will consist of 12 total members of which three members will be
designated by Merix and nine members will be designated by Viasystems.
The combined company will be led by Viasystems' current Chief Executive
Officer, David Sindelar and headquartered in St. Louis, Missouri.
Goldman, Sachs & Co. is acting as financial advisor to Viasystems for
this transaction and Weil, Gotshal & Manges LLP as legal counsel. Thomas
Weisel Partners LLC is acting as financial advisor to Merix with Orrick,
Herrington & Sutcliffe as legal counsel.
Investor Call
Viasystems' and Merix' senior management will host a joint conference
call for investors on Wednesday, October 7, 2009 at 7:30 a.m. Central
Daylight Time (5:30 a.m. Pacific Daylight Time.) To participate in the
call, domestic and international callers dial (612) 326-1011, conference
code 117807. The call will be simultaneously webcast on Viasystems'
website at www.viasystems.com
and Merix' website at www.merix.com.
About Viasystems Group, Inc.
Viasystems is a worldwide provider of complex multi-layer, rigid printed
circuit boards (PCBs) and electro-mechanical solutions. Its PCBs serve
as the foundation for almost all electronic equipment, and its related
electro-mechanical solutions include systems integration, assembly,
final product testing and fulfillment. The company's 10,000 employees in
North America and Asia serve more than 125 customers in the automotive,
telecommunications, computer and data communications and industrial and
instrumentation/medical/consumer markets. For additional information
about Viasystems, please visit the company's website at www.viasystems.com.
About Merix Corporation
Merix is a leading manufacturer of technologically advanced, multilayer,
rigid printed circuit boards for use in sophisticated electronic
equipment. Merix provides high performance materials, quick-turn
prototype, pre-production and volume production services to its
customers. Principal markets served by Merix include communications and
networking, computing and peripherals, test, industrial and medical,
defense and aerospace and automotive end markets in the electronics
industry. Merix has 3,000 employees in North America and Asia serving
approximately 800 customers in the telecommunications/networking,
automotive, computer and data, industrial/medical and test, and defense
and aerospace markets. Additional corporate information is available on
the internet at www.merix.com.
Forward-Looking Statements:
Certain statements in this communication may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements relate to a variety of matters,
including but not limited to: the operations of the businesses of
Viasystems and Merix separately and as a combined entity; the timing and
consummation of the proposed merger transaction; the expected benefits
of the integration of the two companies; the combined company's plans,
objectives, expectations and intentions and other statements that are
not historical fact. These statements are made on the basis of the
current beliefs, expectations and assumptions of the management of
Viasystems and Merix regarding future events and are subject to
significant risks and uncertainty. Investors are cautioned not to place
undue reliance on any such forward-looking statements, which speak only
as of the date they are made. Neither Viasystems nor Merix undertakes
any obligation to update or revise these statements, whether as a result
of new information, future events or otherwise.
Actual results may differ materially from those expressed or implied.
Such differences may result from a variety of factors, including but not
limited to: legal or regulatory proceedings or other matters that affect
the timing or ability to complete the transactions as contemplated; the
possibility that the expected synergies from the proposed merger will
not be realized, or will not be realized within the anticipated time
period; the risk that the businesses will not be integrated
successfully; the possibility of disruption from the merger making it
more difficult to maintain business and operational relationships; the
possibility that the merger does not close, including but not limited
to, due to the failure to satisfy the closing conditions; any actions
taken by either of the companies, including but not limited to,
restructuring or strategic initiatives (including capital investments or
asset acquisitions or dispositions), developments beyond the companies'
control, including but not limited to, changes in domestic or global
economic conditions, competitive conditions and consumer preferences,
adverse weather conditions or natural disasters, health concerns,
international, political or military developments, and technological
developments. Additional factors that may cause results to differ
materially from those described in the forward-looking statements are
set forth in the Annual Report on Form 10-K of Viasystems, Inc. for the
year ended December 31, 2008, which was filed with the Securities and
Exchange Commission ("SEC" ) on March 30, 2009, under the heading "Item
1A. Risk Factors" and in the Annual Report on Form 10-K of Merix for the
year ended May 30, 2009, which was filed with the SEC on July 30, 2009,
under the heading "Item 1A. Risk Factors," and in each company's other
filings made with the SEC available at the SEC's website, www.sec.gov.
Important Merger Information and Additional Information:
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval. In connection with the proposed transaction,
Viasystems and Merix will file relevant materials with the SEC.
Viasystems will file a Registration Statement on Form S-4 that includes
a proxy statement of Merix and which also constitutes a prospectus of
Viasystems. Merix will mail the proxy statement/prospectus to its
shareholders. Investors are urged to read the proxy
statement/prospectus regarding the proposed transaction when it becomes
available, because it will contain important information. The proxy
statement/prospectus and other documents that will be filed by
Viasystems and Merix with the SEC will be available free of charge at
the SEC's website, www.sec.gov,
or by directing a request when such a filing is made to Merix
Corporation, 15725 SW Greystone Court, Suite 200, Beaverton Oregon
97006, Attention: Investor Relations or by directing a request when such
a filing is made to Viasystems Group, Inc., 101 South Hanley Road, Suite
400, St. Louis, Missouri 63105, Attention: Investor Relations.
Viasystems, Merix, their respective directors and certain of their
executive officers may be considered participants in the solicitation of
proxies in connection with the proposed transaction. Information
about the directors and executive officers of Merix is set forth in
Merix' definitive proxy statement, which was filed with the SEC on
August 26, 2009. Information about the directors and executive officers
of Viasystems is set forth in the Form 10-K of Viasystems, Inc., which
was filed with the SEC on March 30, 2009. Investors may obtain
additional information regarding the interests of such participants by
reading the proxy statement/prospectus Viasystems and Merix will file
with the SEC when it becomes available.
U.S. Internal Revenue Service (IRS)
Circular 230 Notice: To ensure compliance with requirements
imposed by the IRS, we inform you that any U.S. tax advice contained in
this communication (including any attachments) is not intended or
written to be used, and cannot be used, for the purpose of (i) avoiding
penalties under the U.S. Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any transaction or matter
addressed herein.
Viasystems Media Contact:
Nicole Schoenberg, 312-932-2834
nicole.schoenberg@fleishman.com
or
Merix
Investor Contact:
Allen Muhich, 503-716-3652
allen.muhich@merix.com
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