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ST. LOUIS — Viasystems Group, Inc. (NASDAQ: VIAS) announced today that it has completed its $283 million acquisition of DDi Corp. (NASDAQ: DDIC), strengthening Viasystems’ position as a world-class leader in printed circuit board (“PCB”) manufacturing and related electro-mechanical solutions. Viasystems announced its intention to acquire DDi on April 4, 2012.
“This acquisition creates a combined company with a substantial North American manufacturing presence serving high-mix, low-to-medium-volume needs of customers, to complement a significant high-volume manufacturing footprint in China,” stated David M. Sindelar, Chief Executive Officer of Viasystems. “Our global customers have access to state of the art, high technology quick-turn manufacturing services with seamless access to high-volume, low-cost complex PCB manufacturing off-shore. Further, the acquisition strengthens our financial model through the addition of profitable operations with positive cash flows, which we expect to be accretive to our earnings in our third quarter and thereafter.”
The combined company has over 15,600 employees and manufacturing floor space exceeding 4.3 million square feet in China and 1.0 million square feet in North America.
Financing
On April 30, 2012, the company’s wholly-owned subsidiary, Viasystems, Inc., completed a private placement of $550 million 7.875% Senior Secured Notes due 2019. The proceeds were used to fund the acquisition of DDi, to redeem all of Viasystems Inc.’s outstanding $220 million 12% Senior Secured Notes due 2015 (the “2015 Notes”), and to pay transaction fees and expenses related to the private placement, the redemption of the 2015 Notes and the acquisition of DDi. The redemption of Viasystems Inc.’s 2015 Notes was completed on May 30, 2012.
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I definitely see consumers benefiting from lower gas prices, but a more important measure will be what freight and shipping companies do. For example, will airlines get rid of their $25 baggage fees? Will freight companies reduce their prices? I doubt it very much but I hope I am pleasantly surprised. With the exception of consumables (energy, groceries) it takes a long time to see an extended benefit from lower oil prices–if ever.
I'd like airlines to get rid of the $25 luggage fee too. It's unlikely they will, though. As you noted, lower fuel prices could benefit the industry more in the transportation sector where it could reduce costs for truckers who ship finished goods to retailers and components the last mile to assembly plants. What are the other potential benefits? Pricing isn't going up anytime soon so that could make for better planning. That's about it. Strong growth will come when job growth comes back and employers scramble to fill positions.
A recent poll on EBN indicated many respondents were expecting the second half to be an improvement on the first half. If your conclusion is correct that lower crude oil is pointing to economic slowdown, manufacturers may have to explore ways of keeping demand for their products up.
Gas price of $80 a barrel is good price. Anything above it is speculation. So falling gas price has not much to do with high-tech.
Barbara I agree. I don't foresee airlines extending this generosity towards baggages handling fees either. Historically, companies don't usually pass on this gains immediately However, we might over some time (as you said) for example benefit from a reduction in flight tickets, lower costs from logistics and other transporter companies. We'll see.
_hm, Gas prices does have an impact on the direction of technology, research and development. For example, concerns surrounding the of research technologies such as Solar power, Wind power, hybrid cars and hydrogen fuel cells is largely due to increase in oil prices. Hence, higher fuel prices lead to a reduction in this kind of economic activity. I also think that a fall in oil prices will provide the high tech manufacturers the necesary tools for a better visibility into supply activities. What's your thoughts?
Bolaji, as you know, in any economy, the large portion of the economic activity is dictated by consumption, the overall demand for goods and services. Consumers would be able to spend more on other activity if the price of oil stays low. Therefore I would imagine now that manufacturers will seek ways to keep the demand of their products up. I think that makes perfect sense
Interesting article, as usual from you, Anna; I am wondering why tech is still strong impacted by oil. No to say it should be right to avoid any correlation, but the fact is alternatives for limiting oil's impact on the market, considering all segments, are still away (speaking for myself).
I look it differerntly. The gas price effect last for very short time – few days to few weeks. But for litlle longer time over few months, people forgets it and it does not effect really.