MANHASSET, N.Y. Seeking to diversify its markets, electronic components supplier CTS Corp. (Elkhart, Ind.) has reached a definitive agreement to acquire SMTEK International Inc. (Moorpark, Calif.), an electronic manufacturing services (EMS) provider, for cash and stock. In addition, CTS will assume SMTEK's outstanding debt load, estimated at $15 million.
CTS, which derives approximately a third of its revenue from its EMS business, serves mostly the computing and communications markets. By acquiring SMTEK, the company sets a foothold in the medical, industrial and security, and aerospace and defense industries.
SMTEK had sales in the last reported 12 months of $102.4 million and operating earnings of $4.0 million. With operations on both the East and West Coasts of the U.S., and in Southeast Asia, the company has over 25 major customers.
CTS expects the transaction to close in the first quarter of 2005. The company expects the combined EMS operation to generate annual revenue exceeding $360 million and be accretive to earnings by 2 to 3 cents per share the first year.