Technitrol Inc. (NYSE: TNL) has agreed to sell its Denmark-based Medtech components business to Altor Equity for $200 million. The business generated $110 million in revenue last year, and includes the balanced armature receivers, high-end microphones and electromechanical devices for the hearing aid, high-end audio headset and medical device markets.
Technitrol, Inc. (NYSE:TNL) announced today that the company has entered into a definitive agreement with Altor Fund III (“Altor”) to sell its Medtech components business (“Medtech”) for $200 million in cash, subject to final working capital adjustments. Medtech includes the former Sonion A/S’s balanced armature receivers, high-end microphones, and electromechanical devices for the hearing aid, high-end audio headset, and medical device markets. The business generated revenues of $110 million for the trailing twelve months ended March 31, 2009. Technitrol will retain the former Sonion business selling high-volume transducers mainly for speakers used in cell phones and similar communication devices. Medtech is headquartered in Denmark with manufacturing facilities in Vietnam and Poland.
Technitrol will apply the net sale proceeds to reduce its outstanding debt which will result in an immediate reduction in its debt-to-EBITDA leverage ratio. Additionally, the debt repayment will increase operating flexibility by reducing quarterly interest expense by approximately $2.0 million. The transaction is expected to close in late June or early July 2009.
Excluding Medtech for the entire year, revenues in Technitrol’s remaining Electronic Components Group (“Electronics”) are expected to exceed $450 million in 2009 and to generate EBITDA in excess of $35 million.
The sale of Medtech will allow the remaining Electronics business of Technitrol to increase its focus on expanding its presence and penetration in its core markets, which are expected to benefit from technology transformation and infrastructure build-outs in the years ahead. Core markets for Electronics’ components include:
— wireline communications (37% estimated pro forma Electronics revenue
share), for use in switches, hubs, routers, and cable and telephony
devices enabling voice, video and data (“triple-play”) services;
— wireless communications (38% estimated revenue share), for use in
handsets, handheld devices, and machine-to-machine and wireless
infrastructure devices used in voice and data networking, automotive and
energy monitoring systems; and
— power electronics (25% estimated revenue share), for use in applications
such as automotive electronic systems, power converters, voltage
regulators, power-sensing equipment used in the “smart grid” and
military/aerospace navigation and communication systems.
Technitrol also announced that it and its lender banks have agreed to modify the terms of its senior credit agreement to allow for this and subsequent business divestitures and for accelerated debt repayments.
Based in Philadelphia, Technitrol is a worldwide producer of electronic components, electrical contacts and assemblies and other precision-engineered parts and materials for manufacturers in the wireless and wireline communications, military/aerospace, automotive and electrical equipment industries. For more information, visit Technitrol’s Web site at http://www.technitrol.com.
The Altor funds (Altor) are private equity funds comprising the “Altor 2003 Fund,” with committed capital of EUR 650 million, the “Altor Fund II,” with committed capital of EUR 1,150 million, and the “Altor Fund III,” with committed capital of EUR 2,000 million. Altor is advised by Altor Equity Partners. Altor invests in companies in the Nordic region with a focus on value creation through growth initiatives, strategic development and operational improvements. Among Altor’s investments are Lindorff, AGR Group (Listed on the Oslo Stock Exchange), Relacom, Ferrosan, Meyn, Aalborg Industries, PaloDEx, Navico, Byggmax, Nimbus Boats, SPT Group, PIAB, Dustin, Helly Hansen, Euro Cater, Vatus, Northstar, Wrist, Q-matic, Constructor, Papyrus, Carnegie and Max Matthiessen. Prior investments include ACO Hud AB (divested to Omega Pharma) and Dynapac (divested to Atlas Copco). For more information, please visit www.altor.com.