Laguna-based semiconductor manufacturer Cirtek Holdings Philippines Corp. (CHPC) (PSE: CHIPS), today announced that its wholly-owned subsidiary Cirtek Electronics International Corporation (CEIC) has entered into a sale and purchase agreement with REMEC Broadband Wireless Holdings (REMEC), for the purchase of 100% of the shares of REMECs manufacturing division, REMEC Broadband Wireless International, Inc. (RBWI), a Philippine-based manufacturer of value added, highly integrated technology products. REMEC and its remaining subsidiaries will continue to design and market its top-of-class telecommunications products globally under its REMEC brand, and, as part of this sale, REMEC will enter into a manufacturing agreement with Cirtek to manufacture REMECs products under a long term contract manufacturing relationship.
CEIC will acquire RBWI for consideration of between US$10M-US$12 Million. The final amount of such consideration will be determined based on the net asset value of RBWI as of the closing date of the transaction, with such determination to be agreed to by the parties. The Board of Directors of each company has approved the transaction, which is expected to close on July 30 2014, subject to customary closing conditions. CHPC expects to fund the transaction through a combination of available cash on hand and proceeds from a corporate notes issuance.
According to CHPC Chairman Jerry Liu, REMECs proven and robust manufacturing and product capabilities, and high level of engineering and technical expertise in the wireless communication industry, complement Cirteks current competencies in customer- and application-specific IC packages.
Combined, we are now well-positioned to provide more comprehensive and sophisticated solutions to our existing customers and to the addressable market, said Mr. Liu.
RBWI has over 18 years of experience in producing high quality niche PCBA and box-build in low/medium/high volume and high mix products for industrial and consumer applications, such as RF/microwave, emerging products of OEMs and ODMs for commercial, industrial, military and telecommunications applications, and providing related repair services. These unique capabilities and extensive experience in RF and Microwave manufacturing and engineering services offer a versatile competitiveness in this field.
RBWIs contract manufacturing capabilities range from component level (transceivers, synthesizers, oscillators, mixers, filters switches, microwave devices), sub-system and module level (power amps, transceivers, filters, diplexers, mixers, mixed signal, PCBA), system level (spread spectrum radios, power amplifiers, repeaters, modem, Outdoor RF Radios (ODU, IP Radio), 6GHz to 42GHz, broadband radios - 60GHz to 80GHz , and Indoor RF Radios (IRFU, IDU).
RBWI has shipped more than 1,000,000 finished products (ODUs, IP radios, transceivers and amplifiers) which have been deployed extensively around the world with field-proven MTBF of over 100 years.
RBWI President Domingo Bonifacio praised the transaction and said, "This will allow us a more comprehensive integration and synergy for both our engineering and product capabilities, and we are very excited about the opportunities that we foresee given current market trends. Dave Newman, REMECs CEO, was equally optimistic saying, "We are excited about having the opportunity to work with Cirtek and to have our products manufactured by these highly capable and very experienced organizations."
According to CHPC CFO Anthony Buyawe, The acquisition immediately expands Cirteks manufacturing capacity and capability, adds to Cirteks customer base, and further increases the presence of Cirtek in high-growth end markets such as telecommunication, automotive, medical, satellite communication, aerospace and defense.
We expect the new business to make a material contribution to the Cirtek groups business and financial performance moving forward, said Mr. Buyawe. This acquisition, together with the sustained expansion of our core business, puts Cirtek in a strong position to achieve US$100 Mn in consolidated sales by FY2015.
#####
About Cirtek
Cirtek is an independent complete solution provider for subcontract manufacturing of semiconductor devices with 29 years of experience in the assembly and testing segment. It provides turnkey solutions that include package design and development, wafer probing, wafer back grinding, assembly and packaging, final testing of semiconductor devices, and delivery and shipment to its customers end users. It listed on the Philippine Stock Exchange in November 2011 under the ticker CHIPS. Cirtek recently acquired REMEC Broadband Wireless International, Inc. (RBWI), a Philippine-based manufacturer of value added, highly integrated technology products.
About REMEC Broadband Wireless
REMEC Broadband Wireless Holdings and its subsidiary REMEC Broadband Wireless, LLC design and market telecommunications products in the 6-80GHz frequency bands for the point-to-point radio, cellular backhaul, enterprise, satellite communications and military markets. REMECs products are manufactured in the Philippines by REMEC Broadband Wireless International, Inc., which, following consummation of the transaction described above, will be a division of Cirtek.