Technitrol Buys Filtronic Unit

Filtronic sells its mobile handset antenna business, LK Products, to Technitrol

August 9, 2005

2 Min Read

SHIPLEY, U.K. -- Filtronic (LSE – FTC/L), an original designer and global manufacturer of microwave electronic subsystems for the wireless telecommunications and defence industries, announces the agreed disposal of its mobile handset antenna business, LK Products OY (“LK”), to Technitrol, Inc (NYSE – TNL), a worldwide producer of electronic components and electrical contact products and other products to a diversity of electronics-based and electrical industries, for an initial consideration of €67 million (approximately £46.6m or approximately $82.8 million).

In addition, the terms of the purchase include a revenue-based deferred consideration whereby Technitrol will pay Filtronic one Euro for each Euro of revenue in excess of €85 million achieved by LK for the 12 months ending 31 May 2006. Closing of the transaction is expected before 30 September 2005.

The consideration proceeds are being financed either entirely with cash on hand or with a combination of cash and credit under Technitrol’s multi-currency credit facility.

LK is the market leader in the provision of internal antennas for mobile handsets, with an estimated global market share of about 16%. It is based in Kempele, Finland and has additional production operations in China and Hungary, with offices in South Korea and San Diego, California. LK contributed 17%, or £50 million (2004 restated: £60.2 million), of Filtronic’s total group sales of £262.9 million in its financial year ended 31 May 2005 (2004 restated: £245.1 million) and made an operating profit of £3.6 million (2004 restated: £11.2 million). As at 31 May 2005, LK represented consolidated gross assets of approximately £48 million, including goodwill of approximately £27m.

Said John Roulston, Filtronic CEO, “The sale of the handset products business serves strategic goals for both buyer and seller and will also bring advantage to customers. Filtronic will use the proceeds to eliminate its long-term bank debt, thereby freeing the company to take more advantage of the growing wireless infrastructure market. Technitrol, on the other hand, will gain immediate market share in a business sector where its volume production methods and material sourcing capacity can contribute efficiencies and its market imprint can accelerate diversification. Customers will benefit from the energy of the new ownership and the synergies forged with Technitrol’s volume product range.”

“Filtronic will continue to cooperate technologically with LK Products so that strategic plans for the ongoing group are preserved by this sale. Throughout the sale process we became very impressed by the outlook of Technitrol’s management and we firmly believe our technology cooperation will bring future business opportunities for both of us.”

Filtronic plc

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