Alpha Gen Capital • 12 Comments
Helix Investment Research
Sep. 8, 2015, 6:31 PM
- NEXTracker makes advanced single-axis trackers for orienting solar panels towards the sun. FLEX (formerly Flextronics) is buying the company for $245M in cash up-front + up to $85M in earn-out payments.
- NEXTracker is expected to contribute $80M-$120M to FQ3 (calendar Q4) revenue after the acquisition closes in early December, and will operate as a subsidiary within Flex's energy products unit.
- FLEX +0.5% after hours. The deal follows one to buy Dutch automotive mirror actuator maker Mirror Control for $494M.
Apr. 29, 2015, 6:41 PM
- In addition to missing FQ4 revenue estimates (while beating on EPS), Flextronics (NASDAQ:FLEX) is guiding for FQ1 revenue of $5.6B-$6.2B and EPS of $0.20-$0.26, almost entirely below a consensus of $6.5B and $0.26.
- No explanation is given for the outlook in the earnings release. A strong dollar is a likely headwind. Soft telecom equipment demand might be as well.
- Separately, Flextronics has announced it's buying Mirror Controls (MCi), a Dutch maker of glass and powerfold mirror actuators for the auto industry, for $494M in cash (presumably offshore). With MCi having trailing revenue of $216M, Flextronics is paying 2.3x sales.
- Flextronics notes MCi has "highly automated" manufacturing facilities in China, Mexico, and Ireland, and has "historically" seen 20% Y/Y sales growth. The deal is expected to close in calendar Q3 (FQ2), and be accretive to EPS/cash flow.
- Shares have fallen to $11.62 AH.
- FQ4 results, PR
Apr. 15, 2015, 10:29 AM
- Alcatel-Lucent (ALU -16.8%) has nosedived following news of its $16.6B deal to merge with Nokia (NOK -1.6%). Based on Nokia's Tuesday close of $7.96, the all-stock deal values Alcatel at €4.09/share ($4.35/share) to shareholders - well below yesterday's close of $4.93, though up from where shares traded ($4.07) before the first report of deal talks emerged.
- Along with the deal, Nokia has confirmed it's exploring options for its HERE mapping/navigation unit, including a possible sale; analysts have argued HERE could fetch more than the €2B Nokia officially values the business at.
- Meanwhile, Reuters reports contract manufacturer Flextronics (FLEX +1.1%) is in advanced talks to buy the manufacturing arm of Alcatel's Shanghai Bell Chinese telecom equipment JV. The JV had 2014 revenue of €3.1B ($3.28B).
- Nokia will own 66.5% of the post-merger company, and Alcatel 33.5%. The company will operate under the Nokia brand and be headquartered in Finland. Nokia chairman Risto Siilasmaa will be its chairman, and Nokia CEO Rajeev Suri its CEO. The board is expected to have 9 or 10 members, with 3 from Alcatel-Lucent (one of whom will be vice chairman).
- The companies are aiming for €900M/year in cost synergies by 2019, and €200M/year in interest savings by 2017. Nokia is maintaining its dividend, but is suspending buybacks until the deal closes. As of the end of 2014, NOK/ALU had €7.4B in net cash between them.
- In a presentation (.pdf), NOK/ALU assert they'll offer carriers an end-to-end mobile/wireline portfolio covering mobile radio and core networks, IP routing, optical networking, cloud/SDN software, and various related services. Combined R&D spend of €4.7B/year is on par with Cisco's.
- Bernstein has upgraded Nokia to Market Perform, and downgraded Alcatel to the same rating. Regulators are expected to take a close look at the deal's impact on the mobile infrastructure market - especially in the U.S., where Chinese firms are effectively locked out.
Dec. 3, 2012, 5:13 PM
Struggling Flextronics (FLEX) is acquiring Saturn Electronics & Engineering, a provider of contract manufacturing services, solenoids, and wiring for a variety of end-markets, for an undisclosed sum. Saturn recently reported annual sales of $300M. The deal could be an effort on Flextronics' part to lower its exposure to soft tech and consumer electronics industries such as PCs, TVs, servers, and networking gear.| Dec. 3, 2012, 5:13 PM
Mar. 12, 2012, 9:58 AM
Flextronics (FLEX -0.3%) is acquiring fellow electronics contract manufacturer Stellar Microelectronics for an undisclosed sum. Stellar, which focuses on building hardware for the aerospace, defense and medical markets that requires custom packaging, has annual revenue of nearly $100M. The deal is expected to close by the end of April.| Mar. 12, 2012, 9:58 AM
Jul. 12, 2011, 12:49 PM
Following a report that Cisco (CSCO) is looking to sell its set-top box plant, Ticonderoga Securities speculates potential buyers include contract manufacturers Flextronics (FLEX), Jabil Circuit (JBL), and Sanmina-SCI (SANM). During its FQ3 earnings call, Cisco referred to set-top boxes as a business that's "under pressure."| Jul. 12, 2011, 12:49 PM