Platinum Equity has agreed to sell PCI Limited, an electronics manufacturing services provider, to Toronto-based public company Celestica. The deal is valued at $306 million in cash. Lincoln International is serving as financial adviser to Platinum Equity, while BDA Partners is providing advisory services to Platinum Equity in Asia.
LOS ANGELES (September 21, 2021) – Platinum Equity announced today the signing of a definitive agreement to sell PCI Limited (“PCI”), an electronics manufacturing services provider based in Singapore, to Celestica Inc. (TSX: CLS) (NYSE: CLS), headquartered in Toronto, a leader in design, manufacturing and supply chain solutions for the world’s most innovative companies, for $306 million in cash. The sale is expected to close in mid-fourth quarter of 2021, subject to regulatory approval and customary closing conditions.
PCI is a fully integrated design, engineering and manufacturing solutions provider with six manufacturing and design facilities across Asia. The business serves diverse end-markets, including the automotive, industrial equipment, commercial, consumer/lifestyle, and medical segments.
Platinum Equity, a Los Angeles-based global private equity firm focused on acquiring businesses that can benefit from the firm’s operational expertise, acquired PCI in April 2019 in a public-to-private transaction. The PCI investment was led by Platinum Equity’s Singapore office.
“We have committed substantial financial, M&A and operational resources to our investment strategy in Asia and PCI’s success is yet another example of how we are creating value in the region,” said Jacob Kotzubei, the partner in Platinum Equity’s Los Angeles headquarters who oversees the firm’s Singapore-based team. “We have deep experience transacting in Asia and a dedicated team on the ground that has real momentum.”
The PCI sale will mark Platinum Equity’s second divestiture in Singapore in the past year, having sold Singapore-based Compart Systems to Shanghai Wayne Enterprises in December 2020.
“By partnering with PCI’s leadership team, we accelerated the company’s transformation into a technology-driven enterprise that is integral to its customers’ product development and supply chain ecosystems,” said Soo Jin Goh, Managing Director at Platinum Equity and head of the firm’s Singapore-based investment team. “We invested in people and systems, transformed the company’s sales organization and go-to-market approach to accelerate growth, and initiated ‘smart factory’ automation projects to increase efficiencies and create operating leverage as the company continues to scale.”
Since Platinum Equity’s acquisition of PCI, the company grew annual revenue by more than 40% and substantially improved its profitability. PCI also doubled its pace of customer acquisition during that time, with an emphasis on meeting the increased demand for connected products and devices. This resulted in a substantial contract win in June 2021 to manufacture a wearable contact tracing device as part of the Singapore government’s efforts to stop the spread of Covid-19.
“Under Platinum Equity’s ownership, we have accelerated our transformation on many fronts, investing in machinery and system upgrades, adding new talent to our organization, and setting the stage for a new period of growth and expansion,” said PCI CEO EL Teo. “Celestica is an industry leader, and the ideal home for our business going forward. We are excited to leverage Celestica’s global footprint and significant resources to rapidly expand our business and introduce our solutions to more customers around the world.”
“The acquisition of PCI will enable us to build on our transformation initiatives and expand our portfolio with innovative capabilities in key growth markets,” said Rob Mionis, President and CEO, Celestica. “PCI has built one of the premier teams in the industry and a differentiated set of capabilities that make them a true value-added partner to their customers. By combining our portfolios and innovation platforms, we will be able to capitalize on emerging industry trends and strengthen our offerings to customers in order to generate significant value for all Celestica shareholders.”
Lincoln International is serving as financial advisor to Platinum Equity on the sale of PCI. BDA Partners is providing advisory services to Platinum Equity in Asia. Duane Morris is serving as Platinum Equity’s legal advisor on the transaction.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with more than $25 billion of assets under management and a portfolio of approximately 50 operating companies that serve customers around the world. The firm is currently investing from Platinum Equity Capital Partners V, a $10 billion global buyout fund, and Platinum Equity Small Cap Fund, a $1.5 billion buyout fund focused on investment opportunities in the lower middle market. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 25 years Platinum Equity has completed more than 300 acquisitions.
Cautionary Note Regarding Forward-Looking Statements
To the extent that this press release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and forward-looking information within the meaning of Canadian securities laws, please refer to Celestica’s press release from today at “Cautionary Note Regarding Forward-Looking Statements” for identification and discussion of the material underlying assumptions and material risks associated with, as well as further information concerning, such forward-looking statements and information. Such press release may be accessed under Celestica’s profile at sec.gov and sedar.com or on Celestica’s web site at celestica.com.”