Ferro procured electronic packaging materials manufacturer in US

Ferro procured electronic packaging materials manufacturer in US

11:11 AM, 2nd November 2016
Ferro procured electronic packaging materials manufacturer in US

CLEVELAND, US: Ferro Corporation has purchased a privately held electronic packaging materials company, Electro-Science Laboratories Inc (ESL) headquartered in King of Prussia, Pennsylvania (US). The company paid $75 million excluding customary adjustments and fees.

The acquisition of ESL boosts Ferro’s position in the electronic packaging materials space with complementary products and offers an attractive platform for growth in Ferro’s performance colours and glass business unit.

Full-year 2016 adjusted EBITDA is expected to be $9.2 million, suggesting a transaction multiple, excluding synergies, of 8.2x. Ferro expects synergies in excess of $10 million, with $6 million realised within the first three years of operation. The company expects the transaction to be accretive to earnings in year one.

ESL produces thick-film pastes and ceramic tape systems that enable important functionality in a wide variety of industrial and consumer applications. Its key products are used to build hybrid integrated circuits, modules and sensors that function in harsh conditions. These products are used in aerospace and defence applications, such as satellites. The modules and sensors are used in automobile components, including oxygen sensors. ESL products in heat sensors are used in appliances such as ovens and water heaters. ESL paste systems for heaters are used on a wide variety of substrates, including metal, ceramic and glass.

“This acquisition gives Ferro a more significant share of the addressable market for electronic packaging materials and is highly synergistic within our current Ferro business. While ESL and Ferro both employ similar manufacturing processes, the product portfolios, end use applications and customers are complementary. ESL is a recognised leader in a market that is expected to continue to grow as a result of increasing everyday use of electronics and sensors within our homes, vehicles and offices,” said Peter Thomas, Chairman, president and CEO of Ferro Corporation.

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