Neways to Acquire BuS Group

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Neways Electronics International N.V. (Neways) has signed a letter of intent to acquire 100% of the outstanding shares of BuS Holding GmbH (BuS Group). BuS Group, headquartered in Riesa, Germany, is an electronic solutions provider to the EMS market, with first-rate technological and development expertise and a strong service orientation. BuS Group has a total staff of approximately 900, including 50 developers and records annualized sales of approximately EUR 106 million. The intended acquisition perfectly fits Neways’ strategy and significantly strengthens its footprint in the German EMS market. Neways intends to finance the acquisition with a combination of debt and equity. It is anticipated that the acquisition will be completed in the next few months and will contribute as of deal closure to earnings per share.

The combination of Neways and BuS Group represents a strong strategic fit. The intended acquisition of BuS Group will significantly strengthen its overall EMS market position and in particular its exposure to the important German market with hardly any overlap with Neways’ existing activities in Neunkirchen, Germany, and its current German clients serviced across the group. BuS Group’s customer portfolio is well balanced in both customer size and market sectors. It is based on long-term relationships, and is highly complementary to Neways customer base, which opens many cross sell opportunities.

BuS Group adds new technological capabilities and expertise as well as the potential to share best practices across the combined group in areas such as component and system development, process innovation, production and supply chain management. In addition, the combination is expected to increase purchasing power and will offer the potential of procurement synergies. The combination can also leverage on Neways’ presence and existing (low-cost) production capacity in Asia offering BuS Group clients even more competitive and tailored solutions.  

Neways intends to acquire 100% of the shares in BuS Group. It has been agreed with the selling shareholders of BuS Group that part of the purchase price will be paid in Neways shares. BuS Group’s management team will remain unchanged.

Financing

Neways intends to finance the acquisition with a combination of debt and equity. Neways intends to finance a large part of the acquisition with existing credit facilities and cash on its balance sheet. Neways may potentially draw upon additional new acquisition debt financing resources if required. In addition, Neways anticipates to draw upon the option granted by the annual shareholders’ meeting to issue new ordinary shares up to a maximum of 20% of the ordinary outstanding share capital. Acquisition financing details will be worked out over the coming months. The acquisition financing structure should provide for financial strength and flexibility of the combined group after the transaction.

BuS Group is profitable and financially robust and Neways believes that as a result of the strong strategic fit and highly complementary businesses, substantial profit gains are achievable. In addition, Neways holds substantial tax loss carry forward positions in Germany, which potentially could be faster effectuated as a result of the acquisition of BuS Group. Share dilution of current Neways’ shareholders as a result of the issuance of new shares is expected to be offset by the immediate positive contribution to earnings per share of the acquisition as of deal closure.

About BuS Group

BuS Group is a privately held (family-owned) electronic solutions provider in the EMS market, active across the whole of Germany. BuS Group consists of two operating companies in Germany (Riesa and Erfurt) and one operating company in the Czech Republic (Decin). The company has a total staff of 900, including 50 developers. Based on preliminary annual accounts the company generated sales of around EUR 106 million.

BuS Group’s customers are mainly found in the automotive industry but also in industrial electronics, medical technology, railway, and air traffic. A dedicated operating company in Erfurt provides engineering and product development (support) services across the group and directly to clients. BuS Group’s service portfolio covers the entire value-chain from development through production and logistics.About Neways Electronics International N.V.

Neways Electronics International N.V. (Neways) is an international company active in the EMS market. Neways offers its clients custom-made solutions for the complete production life cycle (from product development to after-sales service) of both electronic components and complete (box built) electronic control systems. Neways operates in a niche of the EMS market and focuses primarily on small to medium-sized specialist series, with quality, flexibility and time-to-market playing a crucial role. Sectors in which Neways' products are used include the semi-conductor, medical, automotive, telecom and defence industries. Neways has operating companies in the Netherlands, Germany, Slovakia, and China, with a total of around 1,909 employees in 2013. In 2013, Neways booked net turnover of EUR 265.0 million. Neways is listed on Euronext Amsterdam (symbol: NEWAY).