-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueComing to Terms With AI
In this issue, we examine the profound effect artificial intelligence and machine learning are having on manufacturing and business processes. We follow technology, innovation, and money as automation becomes the new key indicator of growth in our industry.
Box Build
One trend is to add box build and final assembly to your product offering. In this issue, we explore the opportunities and risks of adding system assembly to your service portfolio.
IPC APEX EXPO 2024 Pre-show
This month’s issue devotes its pages to a comprehensive preview of the IPC APEX EXPO 2024 event. Whether your role is technical or business, if you're new-to-the-industry or seasoned veteran, you'll find value throughout this program.
- Articles
- Columns
Search Console
- Links
- Events
||| MENU - smt007 Magazine
PCB Fab Merger: DDi Corp. Agrees to Acquire Coretec Inc.
November 25, 2009 |Estimated reading time: 3 minutes
ANAHEIM, CA and TORONTO, ON, Canada — DDi Corp. (NASDAQ: DDIC) and Coretec Inc. (TSX: CYY), providers of technologically advanced printed circuit board (PCB) engineering and manufacturing services, entered into a definitive agreement, pursuant to which DDi will acquire Coretec for approximately CDN $25.2 million (U.S. $23.5 million). DDi sees Coretec’s military/aerospace electronics presence in the U.S. as lucrative for the combined North American companies. The acquisition cost comprises approximately CDN $7.4 million in cash for Coretec’s common stock and the assumption of CDN $17.8 million of Coretec debt outstanding as of September 30, 2009. DDi has U.S. $25.6 million of cash on hand as of September 30, 2009. The Coretec debt assumed includes approximately CDN $12.7 million related to long-term facilities secured by property and equipment, and CDN $5.1 million pursuant to the working capital revolver credit facility. Coretec’s revenues over the 12 months ending September 30, 2009 were approximately CDN $77.2 million. The companies will implement a restructuring plan immediately after the transaction closes that is currently estimated to generate U.S. $8 million in annual cost savings. Mikel H. Williams, DDi’s president and CEO, noted that "DDi and Coretec are two of the leading PCB manufacturers in the North American market and share a similar vision and strategy. We believe that a combined organization will strengthen our position in the market, extend our capability to support our collective customers and will be beneficial to our shareholders. Our plans include a full integration of our respective Toronto operations to create a world-class facility with solid customer demand. The combined company will effect an orderly Toronto integration to minimize customer disruption. Further we will integrate our sales, general and administrative functions. The addition of Coretec’s two U.S. facilities will extend our presence in the strategic military/aerospace marketplace and deepen our flex and rigid-flex product capabilities. As with the successful acquisition of Sovereign Circuits, we plan to leverage these facilities’ capabilities into the market with our large sales organization and customer base." Speaking on behalf of Coretec, Paul Langston, president and CEO, stated that “the combination allows the company to drive significant operational and market-based synergies and is a natural fit.” The acquisition will be effected by way of a plan of arrangement under the Business Corporations Act (Ontario), wherein Coretec shareholders will receive CDN $0.38 per Coretec common share. This price represents a premium of approximately 100% to the 20-day volume weighted average price of Coretec common shares on the Toronto Stock Exchange through November 23, 2009, and represents a 12% increase in the total enterprise value of Coretec when compared to the CDN $0.20 per share proposal that DDi publicly announced on October 26, 2009. The boards of directors of each of DDi and Coretec have unanimously approved the Agreement. The Board of Directors of Coretec, after consultation with its financial and legal advisors and based, in part, upon the unanimous recommendation of an independent committee of the Board of Directors of Coretec, has determined unanimously that the arrangement is fair to Coretec’s shareholders and is in the best interest of Coretec. Coretec’s Board unanimously recommends that Coretec shareholders vote in favor of the arrangement. DDi has been advised in the transaction by Mooreland Partners LLC. The proposed Arrangement is subject to customary court approvals as well as approval by the shareholders and option holders of Coretec. Shareholders holding approximately 70.3% of Coretec’s outstanding common shares on a fully diluted basis have signed agreements in support of the Arrangement. It is anticipated that an information circular pertaining to the proposed Arrangement will be mailed by Coretec to its shareholders and option holders in early December 2009. The Arrangement is expected to close on or around December 31, 2009. The Agreement contains customary terms and conditions for a transaction of this nature, including a prohibition upon Coretec from soliciting or initiating any discussion concerning any other business combination or similar transaction, the right of DDi to match any unsolicited superior proposal received by Coretec and a termination fee of US $1 million payable to DDi by Coretec in certain circumstances. Investors and security holders will be able to obtain free copies of the proxy circular (when available) and other documents filed by DDi Corp. and Coretec with the securities regulatory authorities in Canada through the website maintained at www.sedar.com and with the U.S. Securities and Exchange Commission through the website maintained by the SEC at www.sec.gov. Free copies of such documents can also be obtained by directing a request to Investor Relations Department, DDi Corp., 1220 N. Simon Circle, Anaheim, CA 92806 or Investor Relations Department, 8150 Sheppard Avenue East, Toronto, ON M1B 5K2, Canada.