UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14A-101)
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a party other than the Registrant [X]
Check the appropriate box:
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14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[X] Soliciting material pursuant to Section 240.14a-12.
Parlex Corporation
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(Name of Registrant as Specified in Its Charter)
J.E.C. Electronics Sub Two, Inc.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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(JOHNSON ELECTRIC LOGO)
NEWS RELEASE
JOHNSON ELECTRIC TO ACQUIRE PARLEX CORPORATION
Hong Kong, 18th August 2005 - Johnson Electric Holdings Limited ("Johnson
Electric") announced today that through wholly-owned subsidiaries of its direct
investment arm Johnson Electric Capital Ltd, it has entered into a definitive
agreement to acquire Parlex Corporation ("Parlex"), a leading producer of
flexible interconnect products listed on The NASDAQ Stock Market.
The board of directors of Parlex has unanimously approved the acquisition
agreement and intends to recommend to Parlex's shareholders that they approve
the transaction.
Under the acquisition agreement, Johnson Electric will acquire all of the issued
and outstanding common stock of Parlex for US$6.75 per share in cash or US$43.8
million. The total consideration for the acquisition is US$74.6 million,
assuming the redemption of Parlex's convertible preferred shares and including
the assumption of its convertible and non-convertible net debt of approximately
US$27.5 million. Separately, Parlex has also announced that it has entered into
an agreement to divest certain assets of its loss-making multilayer flexible
circuit operation to Amphenol Corporation.
Parlex is a global provider of flexible interconnect solutions to a wide range
of end-market applications, including automotive components, home appliances,
telecommunications, computers and business equipment, medical devices, and
electronic identification. Its product offerings include flexible circuits,
polymer thick-film circuits, flexible interconnect hybrid circuits, laminated
cable, and flexible interconnect assemblies.
Parlex's primary manufacturing facilities are in the People's Republic of China,
the USA, and the United Kingdom. Including the multilayer flexible circuit
operation that is in the
{INNOVATING MOTION LOGO}
process of being divested, the unaudited revenues of Parlex for the nine months
ended 31 March 2005 were approximately US$91 million.
Patrick Wang, Chairman and Chief Executive of Johnson Electric Holdings, said
"The acquisition of Parlex is an exciting opportunity for Johnson Electric Group
to extend its reach and acquire new capabilities in electronics and electronic
assemblies which are becoming an increasingly important factor in the electric
motor systems we produce. We are especially attracted to Parlex because of its
breadth of technological expertise, international operations, and its customer
base which overlaps extensively with Johnson Electric's own. We very much look
forward to working closely with everyone at Parlex to build and grow the
business by leveraging the extensive resources of the Johnson Electric Group."
Herbert W. Pollack, Parlex Chairman, said, "After an extensive review of
strategic options, the Board of Directors of Parlex has concluded that this
course provides the optimal alternative for Parlex. With the financial strength
and extensive customer relationships of the Johnson Electric Group, Parlex will
be in a much stronger position to pursue growth opportunities in the flexible
interconnections industry."
Peter Murphy, Parlex CEO, said, "In the period following the technology sector
downturn in 2001, Parlex faced significant financial challenges that has
constrained its ability to fund its growth and necessitated a major
restructuring. In addition to the sale of assets of Parlex's multilayer division
to Amphenol Corporation, which Parlex also announced today, the merger agreement
with Johnson Electric is the culmination of that restructuring process. We
believe that together these transactions are the most attractive solution for
our shareholders and represent the best means to secure the long-term future of
the business for its employees, customers and suppliers."
Completion of the acquisition is subject to certain conditions, including
approval by Parlex shareholders, and certain customary closing conditions.
Completion is presently expected to take place during the fourth quarter of
2005.
* * * *
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ABOUT JOHNSON ELECTRIC GROUP
Johnson Electric Capital in the direct investment arm of the Johnson Electric
Group. The Johnson Electric Group is one of the world's largest providers of
micro motors and integrated motor systems to global customers in the automotive,
power tools, home appliances, business equipment, audio-visual and personal care
sectors. The group is headquartered in Hong Kong and employs over 33,000 people
in 15 countries worldwide. Johnson Electric Holdings Limited is listed on the
Hong Kong Stock Exchange (code 179) and is a constituent of the Hang Seng Index.
For further information please visit: http://www.johnsonelectric.com
ABOUT PARLEX CORPORATION
Parlex Corporation is a world leader in the design and manufacture of flexible,
interconnect products. Parlex produces custom flexible circuits and laminated
cables utilizing proprietary processes and patented technologies, which are
designed to satisfy the unique requirements of a wide range of customers. Its
manufacturing facilities are located in the United States, China, Mexico and the
United Kingdom. For further information, please visit Parlex on the web at
http://www.parlex.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
CT Hew, GolinHarris Tel: 2522 7928 / 9132 8828
IMPORTANT LEGAL INFORMATION FOR PARLEX SHAREHOLDERS
This communication is being made in respect of the proposed acquisition
agreement involving Johnson Electric and Parlex Corporation. In connection with
the agreement, Parlex Corporation will be filing a proxy statement for the
stockholders of Parlex Corporation and other documents regarding the proposed
transaction, with the U.S. Securities and Exchange Commission. Before making any
voting or investment decision Parlex Corporation's stockholders and investors
are urged to read the proxy statement regarding the acquisition agreement and
any other relevant documents carefully in their entirety when they become
available because they will contain important information about the proposed
transaction. The proxy statement and other documents will be available free of
charge at the SEC's website, www.sec.gov. Stockholders and investors in Parlex
Corporation will also be able to obtain the proxy statement and other documents
free of charge by directing their requests to: Office of Investor Relations,
Parlex Corporation, One Parlex Place, Methuen, Massachusetts 01844.
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Parlex Corporation and its directors, executive officers and other members of
management may be deemed to participate in the solicitation of proxies in
respect of the proposed transactions. Information regarding Parlex Corporation's
directors and executive officers is available in Parlex Corporation's proxy
statement for its 2004 annual meeting of stockholders, which was filed with the
SEC on October 27, 2004. Additional information regarding the interests of such
potential participants will be included in the proxy statement and the other
relevant documents filed with the SEC when they become available.
Simultaneously with the issuance of this announcement, Parlex Corporation has
filed a Form 8-K with the Securities and Exchange Commission (the "SEC")
regarding the deal and has attached to this filing a copy of the definitive
agreement. All parties desiring details regarding the conditions of this
transaction are urged to review the contents of the definitive agreement from
the SEC's website at http://www.sec.gov.
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The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representations as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the contents
of this announcement.
JOHNSON ELECTRIC HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)
(Stock Code: 0179)
DISCLOSEABLE TRANSACTION
JOHNSON ELECTRIC HOLDINGS LIMITED ("THE COMPANY") ANNOUNCES THAT ON 18TH AUGUST
2005 THE COMPANY AND CERTAIN OF ITS WHOLLY-OWNED SUBSIDIARIES, ENTERED INTO A
DEFINITIVE MERGER AGREEMENT TO ACQUIRE PARLEX CORPORATION ("PARLEX"), A COMPANY
ORGANISED UNDER THE LAWS OF MASSACHUSETTS, U.S.A., AND LISTED ON THE NASDAQ
STOCK MARKET, FROM ALL THE SHAREHOLDERS OF PARLEX.
UNDER THE DEFINITIVE MERGER AGREEMENT, THE COMPANY WILL ACQUIRE ALL OF THE
ISSUED AND OUTSTANDING COMMON STOCK OF PARLEX IN A CASH MERGER FOR US$6.75 PER
SHARE OR US$43.8 MILLION. THE TOTAL CONSIDERATION FOR THE ACQUISITION IS US$74.6
MILLION, ASSUMING THE REDEMPTION OF PARLEX'S CONVERTIBLE PREFERRED STOCK AND
INCLUDING THE ASSUMPTION OF ITS CONVERTIBLE AND NON-CONVERTIBLE NET DEBT OF
APPROXIMATELY US$27.5 MILLION. THE ACQUISITION IS SUBJECT TO PARLEX
SHAREHOLDERS' APPROVAL AND OTHER CUSTOMARY CLOSING CONDITIONS.
THE ACQUISITION CONSTITUTES A DISCLOSEABLE TRANSACTION OF THE COMPANY UNDER
CHAPTER 14 OF THE LISTING RULES. A CIRCULAR CONTAINING FURTHER INFORMATION ON
THE ACQUISITION WILL BE SENT TO SHAREHOLDERS AS SOON AS PRACTICABLE.
THE MERGER AGREEMENT
Johnson Electric Holdings Limited ("the Company") is pleased to announce that on
18th August 2005, the Company and certain of its wholly-owned subsidiaries,
entered into a definitive merger agreement to acquire Parlex Corporation
("Parlex"), a company organised under the laws of Massachusetts, U.S.A. and
listed on The NASDAQ Stock Market.
Under the agreement, the Company will acquire all of the issued and outstanding
common stock of Parlex for US$6.75 per share in cash. Separately, Parlex has
also announced that it has entered into an agreement to divest certain assets of
its loss-making multilayer flexible circuit ("Multilayer") operation to a
division of Amphenol Corporation.
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Completion of the Acquisition is subject to certain conditions, including
approval by Parlex shareholders, and certain customary closing conditions.
Completion is presently expected to take place during the fourth quarter of
2005.
To the best of the Directors' knowledge, information and belief, having made all
reasonable enquiries, Parlex is independent of the Company and its connected
persons (as defined in the Listing Rules).
THE CONSIDERATION
The cash consideration for the common stock of Parlex amounts to US$43.8
million. In addition, the Company will redeem the outstanding preferred stock at
its aggregate par value of $3.25 million. The total cash consideration is due on
completion and is expected to be financed from Johnson Electric Group's internal
cash reserves. In addition, the Johnson Electric Group will assume Parlex's
existing net debt of US$27.5 million, which includes approximately US$8 million
of debt obligations associated with a lease on a property where the Multilayer
operation is presently located.
The consideration was agreed between the parties after arm's length
negotiations, taking into account a due diligence process undertaken by the
Company and its advisors. Many factors were taken into account including the
cash flow and earnings of the business of Parlex to be acquired and an
assessment of its future growth potential. The Directors consider that the terms
of the Acquisition are fair and reasonable and the Acquisition is in the
interests of the Company and the shareholders as a whole.
INFORMATION ON PARLEX
Parlex is a global provider of flexible interconnect solutions to a wide range
of end-market applications, including automotive components, home appliances,
telecommunications, computers and business equipment, medical devices, and
electronic identification. Its product offerings include flexible circuits,
polymer thick-film circuits, flexible interconnect hybrid circuits, laminated
cable, and flexible interconnect assemblies. Its primary manufacturing
facilities are in the People's Republic of China, the USA, and the United
Kingdom.
Prior to adjustment for the unprofitable Multilayer operation that is in the
process of being divested, the unaudited revenue and loss before tax and
minority interests of Parlex for the nine months ended 31 March 2005 were
approximately US$91 million and US$4 million, respectively. For the twelve
months ended 30 June 2004, the audited revenue and loss before tax and minority
interests were US$96 million and US$8 million, respectively. And for the twelve
months ended 30 June 2003, the audited revenue and loss before tax and minority
interests were US$83 million and US$13 million, respectively. As at 31 March
2005, prior to adjustment for the unprofitable Multilayer operation, Parlex had
unaudited stockholders' equity of approximately US$45 million.
The Company understands that under applicable U.S. Securities and Exchange
Commission disclosure rules Parlex is presently unable to report historical
financial
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information on the business excluding the Multilayer operations. Parlex is
presently scheduled to report its audited consolidated results for the twelve
months ended 30 June 2005 before 30 September 2005. To the extent that Parlex
discloses additional information regarding the historical financial performance
of the business excluding the loss-making Multilayer operation, the Company
intends to provide its shareholders with such information pursuant to the
Listing Rules as soon as is practicable.
REASONS FOR THE ACQUISITION
The Company is among the world's leading producers of micro motors and
integrated motor systems serving automotive and commercial customers worldwide.
The Company considers the Acquisition of Parlex to be consistent with its
strategy of strengthening its capabilities in electronics and investing in
businesses adjacent to its core motor systems operations that offer above
average growth prospects.
Among the factors that the Company considers relevant in its Acquisition of
Parlex are:
- Electronics are becoming an increasingly important factor in many of
the Johnson Electric Group's end-user markets and in the range of
motor systems it supplies. The Johnson Electric Group intends to
utilize Parlex's expertise in interconnection technology and
electronics assembly capabilities in the development of its own
motor systems business.
- A significant proportion of Parlex's existing revenues are derived
from customers that are also customers of the Johnson Electric
Group. The acquisition therefore presents an opportunity to provide
customers with new "motion" system product solutions that draw on
the expertise and technology of the combined businesses.
- Johnson Electric Group expects to be able to assist Parlex in
extending its market penetration in customer segments where the
Johnson Electric Group has a strong existing presence, including
automotive components, home appliances, and business equipment.
GENERAL
The Acquisition constitutes a discloseable transaction of the Company under
Chapter 14 of the Listing Rules. A circular containing further information on
the Acquisition will be sent to shareholders as soon as practicable.
DEFINITIONS
"Acquisition" the acquisition of all the issued and outstanding
shares of Parlex Corporation by the Company through
its wholly-owned subsidiaries
"Company" Johnson Electric Holdings Limited, a company
incorporated in Bermuda with limited liability and
whose
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shares are listed on The Stock Exchange of Hong Kong
Limited
"Directors" the directors of the Company
"Johnson Electric Group" the Company and its subsidiaries
"Listing Rules" Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong
"Multilayer" the multilayer flexible printed circuit board
operations of Parlex Corporation. In a separate
transaction, Parlex has agreed to divest certain
assets of the multilayer operation to Amphenol
Corporation.
"Parlex" Parlex Corporation, a company organised in
Massachusetts, U.S.A. and whose shares are listed on
The NASDAQ Stock Market
By Order of the Board
PATRICK WANG SHUI CHUNG
Chairman and Chief Executive
As at the date of this announcement, the Board of Directors comprises Patrick
Wang Shui Chung, Winnie Wang Wing Yee, Richard Wang Li-Chung being the Executive
Directors, and Wang Koo Yik Chun, Peter Wang Kin Chung being Non-Executive
Directors, and Peter Suart Allenby Edwards, Patrick Blackwell Paul, Arkadi
Kuhlmann, Oscar De Paula Bernardes Neto, Michael John Enright, and Laura
May-Lung Cha being Independent Non-Executive Directors.
Hong Kong, 18th August 2005
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