Kemet Corp. has signed a definitive agreement to purchase a Japanese producer of capacitors, relays and actuators.
The Greenville-based supplier of passive electronic equipment said it is targeting an April 10 closing date to acquire NEC Tokin Corp.
“We are pleased to bring this acquisition to completion in such a positive manner. It has been a long road with hard work by many of the Kemet and NEC Tokin employees,” said Per Loof, Kemet Corp. CEO, in a news release announcing the agreement. “We believe that this combination of our technologies and products will position us to return exponential value to our shareholders over the coming fiscal years.”
As part of the agreement, NEC Tokin will sell its electromechanical division to NTJ Holdings 1 Ltd. for $422 million. NTJ Holdings is owned by funds managed by Japan Industrial Partners Inc., according to the release. The proceeds from that sale will be used to pay approximately $222.4 million of outstanding indebtedness NEC Tokin owes NEC.
Kemet Electronics Corp., a subsidiary of Kemet Corp., will then pay NEC approximately $52.5 million, plus “one-half of the remaining amount which is determined to be the excess amount of net cash proceeds from the sale of the electromechanical division.”
Officials said the definitive stock purchase agreement will lead to “an essentially debt-free balance sheet” for NEC Tokin following the acquisition.
“In addition, our improved balance sheet position, combined EBITDA, and leverage statistics should enable us to refinance our existing debt at improved interest rates, resulting in less cash interest expense and providing additional earnings per share for our shareholders,” Loof said.
According to its website, NEC Tokin has offices in Tokyo, California, Illinois, Texas, Germany, China, Vietnam, Thailand, the Philippines, Singapore and Taiwan.