Benchmark Electronics Inc. said it has bought the electronics manufacturing services unit of CTS Corp., paying approximately $75 million for the division. The business services the industrial, aerospace & defense, medical and communications market, according to a statement issued by Benchmark and CTS.
Like many other medium-size contract manufacturers Benchmark has been deepening its offerings to specialized segments of the electronics industry and the CTS unit acquisition gives it the opportunity to further this strategy. The new deal adds 1,000 skilled workers to Benchmark and allows it to better market its capabilities to new and existing customers.
“The customer-focused, highly-flexible business model that CTS has embraced makes the organization an excellent cultural fit with Benchmark,” said Gayla Delly, president and CEO of Benchmark. “This acquisition supports Benchmark’s strategic commitment to expand our portfolio of leading customers in non-traditional and highly regulated markets and allows us to strengthen the depth and scope of Benchmark’s new product express capabilities on the West Coast.”
CTS said the division being sold has four manufacturing locations in North America and one in Asia and generates about $200 million in sales annually, potentially boosting Benchmark’s sales towards the $3 billion mark.
The sale represents another step in CTS’ transformation and refocus on its core components business. CTS said it will invest more in its traditional sensors business and expand into adjacent markets. The company had sales of $576.9 million in 2012 and analysts on average are projecting it would report revenue of $558.9 million for 2013 and $446.8 million for 2015. Those estimates would most likely be revised downward by analysts.
“By sharpening our focus on our strengths in components and sensors businesses through this transaction, CTS will be better positioned to meet the evolving needs of our customers, increase margins by introducing new value-added products, and grow in attractive adjacencies,” said Kieran O’Sullivan, CEO of CTS in a statement. “We are excited about this opportunity to simplify CTS, focus on our core strengths, and drive profitable growth.”