Benchmark Electronics Agrees to Acquire Commercial Electronics Unit from Lockheed Martin
BETHESDA, MD and ANGLETON, TX, January 23rd, 1998 -- Lockheed Martin Corporation (NYSE: LMT) and Benchmark Electronics, Inc. (NYSE: BHE) announced today that they have reached an agreement under which Benchmark will acquire the stock of Lockheed Martin Commercial Electronics, a wholly-owned subsidiary of Lockheed Martin situated in Hudson, New Hampshire, for $70 million in cash, a portion of which will be funded by bank debt. Lockheed Martin Commercial Electronics, an operating unit of Lockheed Martin Electronics Sector, is one of New England's largest electronics manufacturing services company, providing a broad range of services including printed circuit board assembly and test, system assembly and test, prototyping, depot repair, materials procurement, and engineering support services. Principal customers of Commercial Electronics include leading companies in the networking, computer and telecommunications industries. The business has a workforce of approximately 680 employees.
Benchmark is a full-service supplier of design, engineering and electronics manufacturing services with 1997 revenues of $325 million. The company operates facilities in Angleton, Texas; Beaverton, Oregon; and Winona, Minnesota.
Don Nigbor, president and chief executive officer of Benchmark, stated, "This combination presents an exciting opportunity for our customers, suppliers and employees, broadening our geographic presence and increasing our overall range of capabilities in the rapidly-consolidating and increasingly- competitive contract manufacturing marketplace."
"This proposed transaction enables Lockheed Martin Electronics to refine its focus on core strengths and capabilities in systems integration, defense electronics and closely adjacent markets," said Thomas A. Corcoran, president and chief operating officer of Lockheed Martin Electronics Sector. "At the same time, we believe this move enables Commercial Electronics to become part of a stronger entity in a contract manufacturing industry that is undergoing dramatic change."
Under the agreement, Benchmark Electronics will lease the 250,000-square- foot facility that houses Commercial Electronics in Hudson, NH.
"This proposed transaction will enable us to better serve our customers as we become an integral part of a growing business that is fully dedicated to contract manufacturing," said Roger M. Damphousse, President of Lockheed Martin Commercial Electronics. "We are looking forward to joining the Benchmark Electronics team and to combining our skills and expertise with those of Benchmark Electronics to become a new competitive force in the marketplace."
Following the closing, Mr. Damphousse will join the Benchmark management team as president of the Hudson Division of Benchmark Electronics, reporting to Mr. Nigbor.
The proposed transaction, which is subject to certain government approvals, is expected to close by mid-February. J.P. Morgan acted as financial advisor to Lockheed Martin on the transaction. Benchmark Electronics was advised by Stephens, Inc.
Lockheed Martin Electronics Sector is a global leader in the design, development and production of advanced electronic systems for defense, civil and commercial markets.
It is one of five business sectors within Lockheed Martin Corporation (NYSE: LMT), a highly diversified global enterprise principally engaged in the research, design, development, manufacture and integration of advanced- technology systems, products and services. The Corporation, headquartered in Bethesda, MD, has core businesses in space and telecommunications, electronics, information and services, aeronautics, energy and systems integration. In 1997, Lockheed Martin had net sales of approximately $28 billion.
Benchmark Electronics, Inc. provides contract manufacturing and engineering services to original equipment manufacturers in select industries, including medical devices, communications equipment, industrial and business computers, testing instruments and industrial controls.