Plexus and Kontron AG have announced a strategic manufacturing agreement. Under this agreement Kontron AG will transition all manufacturing of its Kontron Design Manufacturing Services (M) Sdn. Bhd. subsidiary (KDMS) located in Penang, Malaysia to Plexus Corp (Plexus), primarily to its Penang facilities.
Plexus will acquire the inventory and equipment of KDMS as well as hire nearly all KDMS employees; in exchange Kontron will commit to approximately $100 million of incremental revenue annually for two years. No real estate is included in this transaction. The agreement is expected to commence in January 2012 for total consideration of approximately $30-35 million.
“This strategic agreement expands and strengthens our existing relationship with Kontron,” comments Steve Frisch, Regional President Plexus – EMEA. “They are a global leader in embedded computing technology and a strong partner for Plexus in our Industrial/Commercial market sector. Our global leadership in mid-to-low volume, higher complexity manufacturing programs provides Kontron the manufacturing solution that a global leader requires. We are excited about this agreement as it supports further partnering with Kontron in the EMEA region and demonstrates the value of strategic relationships.”
“The agreement enables Kontron to focus on our core competencies in providing superior engineering services,” adds Ulrich Gehrmann, Kontron Chief Executive Officer. “By expanding our relationship with Plexus, Kontron ensures its continued commitment to best-in-class quality products. The result is an increase of efficiency in operational expenses and working capital, positioning Kontron for a larger market penetration of higher gross margin design wins.”
