CTS selling unit to Benchmark Electronics for $75M
Posted: 10/03/2013 at 8:55 am
By: Associated Press
Elkhart-based CTS said Thursday, Oct. 3, that the transaction allows it to concentrate on its components and sensors business and provides more capital for higher-margin businesses.
The deal includes about 1,000 workers and five manufacturing plants in Moorpark, Calif., San Jose, Calif., Londonderry, N.H., Matamoros, Mexico, and Bangkok, Thailand.
Benchmark, which is based in Angleton, Texas, anticipates the transaction adding to its 2014 earnings and generating annual revenue of more than $200 million. It is a product design and manufacturing services provider.
CTS Corp. is in the midst of a companywide strategic evaluation. CEO Kieran O’Sullivan said in a statement that CTS is continuing to look at ways to streamline the business and lower costs.
“Since I joined CTS in January, I have been working closely with the board of directors to evaluate the company’s portfolio in order to ensure alignment with our core vision and business strategies,” Sullivan said in the statement. “By sharpening our focus on our strengths in components and sensors business through this transaction, CTS will be better positioned,” he said.
The electronics-manufacturing segment of CTS’s operations lost $2.1 million in the first six months of the year, the company reported in its second-quarter filing with the U.S. Securities and Exchange Commission. During the second quarter, net sales in the electronics manufacturing segment dropped by 40.4 percent, according to CTS.
In the same filing, CTS said its restructuring process will result in the elimination of roughly 350 jobs sometime next year, though locations for some of the eliminated positions are in overseas manufacturing facilities and not in Elkhart. The rest haven’t yet been announced, though the company will announce those sites later this year.
“As part of our previously announced companywide strategic evaluation, we will continue to right-size our global manufacturing footprint and evaluate ways to streamline the business and reduce costs,” O’Sullivan said.
Elkhart Truth reporter Justin Leighty contributed to this story.