SCHAFFHAUSEN, Switzerland -- TE Connectivity Ltd. has entered into a definitive agreement to acquire Measurement Specialties, Inc. (NASDAQ: MEAS) for $86 cash per share or a total transaction value of approximately $1.7 billion (including assumption of net debt).
Measurement Specialties, a leading global designer and manufacturer of sensors and sensor-based systems with expected revenue of $540 million in its current fiscal year, offers a broad portfolio of sensor technologies including pressure, vibration, force, temperature, humidity, ultrasonics, position and fluid, for a wide range of applications and industries.
"The acquisition of Measurement Specialties is a key part of our strategy to be a leader in the very attractive, high-growth sensor industry and adds nearly $40 billion to our addressable market," said Tom Lynch, TE Connectivity Chairman and CEO. "We are excited about this acquisition as it enables TE to provide customers with an unmatched range of connectivity and sensor solutions that are essential in a world where everything is increasingly connected. We look forward to combining Measurement Specialties' strong breadth of products and technologies with our deep customer relationships and global scale. We are also delighted to welcome their talented team to TE."
Frank Guidone, CEO of Measurement Specialties, said, "The sensor market is quite strong, with both the number of applications and the content per unit increasing every year. We are excited to expand our product offerings to customers around the world through TE's unparalleled go-to-market capabilities. We look forward to working with TE toward a seamless integration for our customers and employees, and becoming the supplier of choice for customers' sensing requirements."
The strategic rationale for the acquisition of Measurement Specialties is as follows:
Establishes a leadership position in the attractive sensor market: The combination of TE's sensor business with Measurement Specialties' leading range of sensors and sensor systems establishes TE as one of the largest sensor companies in the world. The sensor market is a fragmented, large and high-growth market, and the acquisition increases TE's addressable market by nearly $40 billion. TE's scale will be unique in this market.
Accelerates sales and profit growth: TE's scale coupled with Measurement Specialties' broad sensor product range is expected to create double-digit growth in TE's sensor business. TE's deep OEM relationships, unparalleled go-to-market resources, engineering strength, leadership in harsh environment applications, and global footprint are the underlying factors driving this growth. TE also expects to achieve significant cost and tax synergies and generate attractive financial returns for its shareholders.
Increases TE content: The combination of Measurement Specialties with TE creates the leading provider of highly engineered connectivity and sensor solutions. This combination will enable TE to provide a broader range of solutions for its customers and will increase TE's content per application.
The company expects mid-single digit accretion to TE's adjusted EPS in the first year, excluding acquisition related costs.
The transaction will be financed through cash and additional debt. The transaction is subject to the receipt of certain regulatory approvals, approval of Measurement Specialties' shareholders and other customary closing conditions. The transaction is expected to close in calendar year 2014.
TE's financial advisors are Citi and Centerview Partners LLC and outside counsel is Davis Polk & Wardwell LLP. Barclays is the exclusive financial advisor and provider of the fairness opinion to the Measurement Specialties' Board of Directors. DLA Piper is outside counsel to Measurement Specialties.
Conference Call And Webcast For Investors
The company will hold a conference call for investors today beginning at 5:00 p.m. EDT and can be accessed as follows. In the United States, dial 800-230-1093; International: 612-288-0340.
Internet users will be able to access the company's webcast, including slide materials, at the "Investors" section of TE Connectivity's website at http://investors.te.com
An audio replay of the conference call will be available beginning at 7:00 p.m. EDT on June 18, 2014, and ending on June 25, 2014. The dial-in number for participants in the U.S. is 800-475-6701. For participants outside the U.S., the replay dial-in is 320-365-3844, access code: 329902.