Diversified electronic goods manufacturer Amphenol Corporation APH recently inked a definitive agreement to acquire the full ownership of FCI Asia Pte Ltd from the affiliates of alternative investment firm Bain Capital for $1.275 billion. The transaction, expected to be completed by the end of the current year subject to customary closing conditions, will be financed through a combination of cash and debt.
Headquartered in Singapore, FCI manufactures interconnect solutions for the telecom, datacom, wireless communications and industrial markets. The acquisition is a strategic fit for Amphenol with a proven expertise in the development of high-speed, input-output, power and miniaturized interconnect products. This complimentary product portfolio further enriches the service offerings of Amphenol and enables it to better serve its customers in a broad array of end markets.
The acquisition is expected to be accretive to Amphenol’s earnings from the first year of its integration. The transaction is also expected to result in synergistic benefits with Amphenol’s strong operating discipline and FCI’s advanced technological support and experienced management team.
Moving forward, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content on next-generation products. These advanced electronic systems also require new higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which creates excellent opportunities for Amphenol.
Amphenol’s top-line growth is also benefiting from improved end-market demand, new product rollouts, and market share gains. Demand continues to be strong in automotive industrial and mobile networks and military markets. The diversification in end markets with a consistent focus on technology innovation and customer support through all phases of the economic cycle further enable the company to post strong results. A sustained drive for geographic and market diversification has also enabled Amphenol to extend its presence into new customers and applications.
Amphenol presently has a Zacks Rank #3 (Hold). Other stocks that are worth considering in the industry include Mobileye N.V. MBLY, TTM Technologies Inc. TTMI and Uni-Pixel, Inc. UNXL, each carrying a Zack Rank #2 (Buy).
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