ADC Jumps on Krone
ADC Telecommunications Inc. (Nasdaq: ADCT) says it's going to buy access technology and cabling firm Krone Inc. from GenTek Inc. (OTC: GETI) in a deal worth $350 million (see ADC Buys Krone for $350M).
Krone makes copper and fiber optic cabling and connectivity systems for network operators and enterprise customers, and boasts one of the least informative Websites in the industry.
The deal's value comprises about $291 million in cash, with the remaining $59 million comprising "certain defined liabilities," most of which is a pension obligation to Krone's German staff. ADC's share price edged up by 5 cents to $2.57 in early morning trading following the announcement.
ADC is making the buy to expand its customer base into the emerging markets of China, India, Russia, and Eastern Europe. About 80 percent of Krone's revenues come from outside North America, while 70 percent of ADC's sales are in North America. Krone's revenues in 2003 were $316 million with operating income of $13 million, up from $267 million revenues and an operating loss of $10 million in 2002. The acquisition will significantly boost ADC's revenues, which totaled $773.2 million in its most recent full fiscal year ending October 31, 2003.
Krone has more than 2,000 staff, eight factories, and five R&D centers around the world.
— Ray Le Maistre, International Editor, Boardwatch