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CENTENNIAL TECHNOLOGIES, INC.
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(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(1) Title of each class of securities to which transaction applies:
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On January 23, 2001, Centennial Technologies, Inc. issued the following press
release:
Analysts Contacts: Media Contacts:
- ------------------ ---------------
Thomas Alsborg Robert (Bob) Kula
Solectron Corporation Solectron Corporation
+1 (408) 956-6614 (U.S.) +1 (408) 935-5405 (U.S.)
thomasalsborg@ca.slr.com robertkula@ca.slr.com
Richard J. Pulsifer Karen Schwartzman
Centennial Technologies, Inc. Polaris Public Relations
+1 (978) 805-2323 (U.S.) +1 (617) 437-9990 (U.S.)
rpulsifer@cent-tech.com kschwartzman@polarispr.net
SOLECTRON ENTERS INTO DEFINITIVE AGREEMENT TO
ACQUIRE CENTENNIAL TECHNOLOGIES, INC.
- CENTENNIAL'S DESIGN, MANUFACTURING AND MARKETING CAPABILITIES
FOR PC CARD BASED PRODUCTS TO STRENGTHEN
SOLECTRON'S TECHNOLOGY SOLUTIONS BUSINESS UNIT -
For Immediate Release: Jan. 23, 2001
MILPITAS, Calif., and WILMINGTON, Mass. -- Solectron Corporation (NYSE:
SLR), the world's leading provider of electronics manufacturing and supply-chain
management services, and Centennial Technologies, Inc. (NASDAQ: CENL) said today
they have entered into a definitive merger agreement for Solectron to acquire
Centennial. As a result of the transaction, Solectron will acquire all of
Centennial's design, manufacturing and marketing capabilities, which include
memory module and memory card solutions based on SRAM and flash technologies for
OEMs and end users in multiple markets such as telecommunications, data
communications, mobile computing and medical markets. Centennial will operate
under Solectron's Technology Solutions Business Unit, which currently includes
SMART Modular Technologies, Inc. and Force Computers, Inc.
Under the terms of the agreement, Solectron will issue or reserve for
issuance upon the exercise of assumed stock options approximately 2.96 million
shares of Solectron common stock in exchange for all of Centennial's fully
diluted equity, including all outstanding Centennial stock options to be assumed
by Solectron in connection with the transaction. Based upon the average closing
price of Solectron common stock last week, net of the proceeds from the exercise
of stock options, the net purchase price of the transaction will be
approximately US$108 million. Using Centennial's current capitalization and
assuming conversion of Centennial's outstanding convertible preferred stock, the
exchange ratio for the transaction is expected to be approximately 0.536 shares
of Solectron common stock for each share of Centennial common stock. The
transaction will be accounted for as a purchase and is expected to close during
the second quarter of calendar year 2001. The completion of the transaction is
subject to governmental approvals, including antitrust clearance, approval of
the transaction by Centennial's stockholders and other customary closing
conditions.
"We are excited by the opportunity to strengthen our flash memory module
and PC card businesses," said Ajay Shah, president and CEO of the Technology
Solutions Business Unit. "Centennial's expertise in these areas will enhance our
current technology capabilities and expand our presence in United States, Canada
and the United Kingdom. Furthermore, this acquisition extends our Technology
Solutions Business Unit customer base in the linear flash market and provides us
with new opportunities to promote our ATA product line."
"We believe this transaction is good not only for our stockholders, but
also for our customers and employees," said L. Michael Hone, president and CEO
of Centennial. "This agreement with Solectron gives our customers access to
Solectron's substantial financial resources, global reach and technological
capabilities. At the same time, this transaction recognizes and leverages the
significant value and expertise our employees bring to the engineering and
manufacture of custom PC cards."
Solectron will assume responsibility for Centennial's manufacturing
facility and corporate headquarters in Wilmington, Mass., and all of
Centennial's sales and service offices in the United States and United Kingdom.
Solectron expects to offer employment to the more than 140 manufacturing, sales,
engineering and related support associates currently employed by Centennial.
SAFE HARBOR
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, based on current expectations,
forecasts and assumptions that involve risks and uncertainties that could cause
actual outcomes and results to differ materially. In particular, while the
companies have executed a definitive merger agreement, there is no assurance
that the parties will complete the transaction. In the event that the companies
do not receive the necessary government or shareholder approvals or fail to
satisfy conditions for closing, the transaction will terminate. Additional risks
and uncertainties include conditions in the financial markets relevant to the
proposed merger, the failure to achieve expected synergy and efficiencies of
operations, discontinuity of component supply or availability, risk of price
fluctuation, loss of major customers, fluctuations in operating results, changes
in technology, competition, the ability to manage rapid growth, the ability to
manage business integration, risks associated with international sales and
operations, environmental regulations, market risk, segment risk, the ability to
retain key personnel and intellectual property rights enforcement. For a further
list and description of risks and uncertainties, see the reports filed by
Solectron with the Securities and Exchange Commission, specifically Solectron's
forms 8-K, 10-Q, S-3 and 10-K, and by Centennial under the heading "Factors that
May Affect Future Results" contained in Centennial's filings with the SEC. Each
of Solectron and Centennial disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
ABOUT SOLECTRON CORPORATION
Solectron (www.solectron.com), the world's leading supply-chain facilitator,
provides a full range of manufacturing and supply-chain management services to
the world's premier high-tech electronics companies. Solectron's offerings
include new product design and introduction services, materials management,
high-tech product manufacturing, and product warranty and end-of-life support.
The company, based in Milpitas, Calif., and founded in 1977, employs more than
71,000 people in 60 locations worldwide. Net sales for the first three months of
the fiscal year 2001 ended Dec. 1, 2000, was US$5.7 billion. Solectron was the
first two-time winner of the Malcolm Baldrige National Quality Award for
manufacturing.
SMART Modular Technologies, Inc. is a wholly owned operating company within the
Technology Solutions Business Unit of Solectron. SMART, a leading independent
manufacturer of memory and I/O products, offers more than 500 products to
leading OEMs in the computer, networking and telecommunications industries. The
memory product line includes specialty and standard DRAM, Flash memory and SRAM
modules and Flash memory cards. The I/O product line includes standard and
custom wireless and wireline communications devices and modular I/O sub-systems
for client-side and central office applications. SMART operates several
specialized manufacturing and design facilities and has access to the worldwide
manufacturing operations of Solectron Corporation. More information on SMART can
be obtained on the Internet at www.smartmodulartech.com.
ABOUT CENTENNIAL TECHNOLOGIES, INC.
Centennial Technologies, Inc. provides custom and industry standard PC Cards for
original equipment manufacturers, and is a global leader in the integration of
patented and proprietary technology into application-specific cards for
commercial, industrial and military markets. Centennial's headquarters and ISO
9001 certified engineering and manufacturing facility are located in Wilmington,
Mass., just north of Boston, with sales and services offices in California,
Florida, New York, North Carolina, Indiana, Pennsylvania and Texas. Centennial's
international sales and service operations are headquartered in the United
Kingdom. More information about Centennial is available at www.cent-tech.com.
ADDITIONAL INFORMATION
Solectron intends to file a registration statement on Form S-4 and Centennial
intends to mail a proxy statement/prospectus to its stockholders in connection
with the transaction, each of which will contain information about the
transaction. Investors and security holders are urged to read the registration
statement and the proxy statement/prospectus carefully when they become
available. The registration statement and the proxy statement/prospectus will
contain important information about Solectron, Centennial, the transaction and
related matters, including detailed risk factors. Investors and security holders
will be able to obtain free copies of the registration statement and the proxy
statement/prospectus through the web site maintained by the SEC at
http//www.sec.gov, or by directing a request to Solectron at 777 Gibraltar
Drive, Milpitas, Calif. 95035, Attention: Thomas Alsborg, telephone: (408)
956-6614, or Centennial at 7 Lopez Road, Wilmington, Mass. 01887, Attention
Richard J. Pulsifer, telephone: (978) 805-2323. In addition to the registration
statement and the proxy statement/prospectus, Solectron and Centennial file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Investors and security holders may read and obtain free copies of
any such reports, statements and other information through the web site
maintained by the SEC, or by contacting Solectron and Centennial at the
addresses listed above.
Centennial, its directors and certain of its executive officers may be
considered participants in the solicitation of proxies in connection with this
transaction. Centennial's directors are: William J. Shea, Eugene M. Bullis,
Steven M. DePerrior, Jay M. Eastman, L. Michael Hone, David A. Lovenheim and
John J. Shields. Centennial's executive officers are: L. Michael Hone, President
and Chief Executive Officer; Richard N. Stathes, Executive Vice President -
Worldwide Sales & Marketing; Jacques Assour, Senior Vice President - Operations;
John C. Nugent, Managing Director - Centennial Technologies International
Limited; Richard J. Pulsifer, Vice President, Chief Financial Officer and
Secretary; and Mary A. Gallahan, Vice President - Administration and Human
Resources. Information concerning Centennial's directors and executive officers
can be found in documents filed by Centennial with the SEC. Certain directors
and executive officers of Centennial may have direct or indirect interest in
this transaction due to securities holdings, vesting of options and rights to
severance payments if their employment is terminated following the merger.
Additional information regarding participants in the solicitation will be
contained in the proxy statement/prospectus.
###
On January 23, 2001, the following Memorandum was distributed to employees of
Centennial Technologies, Inc.
CONFIDENTIAL: FOR EMPLOYEE USE ONLY
NOT FOR EXTERNAL DISTRIBUTION
MEMORANDUM
TO: Centennial Employees
FROM: Mike Hone
DATE: January 23, 2001
SUBJ: Sale of Centennial Technologies to Solectron
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We expect that many of our employees will have questions concerning our
announcement today that we have entered into an agreement to sell Centennial
Technologies to Solectron. We have tried to anticipate your questions, as shown
here. If you as an employee have a question that is not addressed here, please
don't hesitate to raise it with me or with your manager. Please be advised that
these questions and answers are not to be shared outside the company.
Q: WE'VE JUST GOTTEN PAST THE WORST OF IT AND WE'RE FINALLY BACK ON OUR FEET,
RELISTED, AND DOING WELL. WHY SELL NOW?
A: We're a publicly traded company. We owe it to our stockholders to maximize
shareholder value and this transaction represents the best step for our
shareholders. But it also the best step we can take to protect you, our
employees, in the face of a market for our product that some day will not be
what it is today. We are coming off 10 straight profitable quarters, but the day
of diminishing returns will come, unless we can tap and leverage the resources
of a bigger player to expand our markets and our product offerings. I see this
as the best opportunity with the greatest potential to protect the well-being of
Centennial employees for years into the future.
Q: WHO IS CENTENNIAL BEING SOLD TO?
A: We have signed an agreement with Solectron, under which Centennial will be
operated by the Technology Solutions Business Unit of Solectron, which includes
SMART Modular Technologies, Inc., one of Solectron's subsidiaries. The
Technology Solutions Business Unit has a number of locations throughout the
United States, the closest being a research and development facility in
Westborough, Massachusetts.
Solectron (www.solectron.com), the world's leading supply-chain
facilitator, provides a full range of manufacturing and supply-chain management
services to the world's premier high-tech electronics companies. Solectron's
offerings include new product design and introduction services, materials
management, high-tech product manufacturing, and product warranty and
end-of-life support. The company, based in Milpitas, Calif., and founded in
1977, employs more than 71,000 people in 60 locations worldwide. Net sales for
the first three months of the fiscal year 2001 ended Dec. 1, 2000, was US$5.7
billion. Solectron was the first two-time winner of the Malcolm Baldridge
National Quality Award for manufacturing.
SMART is a wholly owned operating company within the Technology Solutions
Business Unit of Solectron Corporation (NYSE: SLR). SMART, a leading independent
manufacturer of memory and I/O products, offers more than 500 products to
leading OEMs in the computer, networking and telecommunications industries. The
memory product line includes specialty and standard DRAM, Flash memory and SRAM
modules and Flash memory cards. The I/O product line includes standard and
custom wireless and wireline communications devices and modular I/O sub-systems
for client-side and central office applications. SMART operates several
specialized manufacturing and design facilities and has access to the worldwide
manufacturing operations of Solectron Corporation. More information on SMART can
be obtained on the Internet at www.smartmodulartech.com.
SMART is a Centennial competitor, insofar as they make PC cards, but they
are less focused on custom design and manufacture. SMART typically deals in
higher volume and works with a small number of customers. It is Centennial's
strength in custom design and manufacture of PC cards, especially low volume and
high mix, that makes Centennial attractive to both SMART and Solectron.
Q: WHEN DO YOU EXPECT THIS TRANSACTION TO CLOSE?
A: From our perspective, the sooner we can close this transaction, the better
it will be for everyone involved. In any event, we hope to get this closed
during the second calendar quarter of 2001.
Q: WHAT CAN YOU TELL ME ABOUT MY OWN JOB SECURITY?
A: Solectron has representatives here now to discuss this issue with you , but
my expectation is that there will not be any layoffs as a result of this
transaction. To the contrary, Solectron needs each and every one of you if they
are to maximize the investment they are making in our company. They do not have
the capacity to serve the needs of our customers at any of their other plants,
nor do they have the skills of our workforce - so they have no interest in
losing you or the talent you bring to them. Basically Solectron intends to
leverage our unique capabilities to strengthen their company as a whole, and to
grow their customer base.
Q: WILL MY WORK ASSIGNMENT CHANGE?
A: No changes to work assignments are expected at this time. Employees will
likely, however, over the long term, have many more opportunities to step up a
rung on the career ladder, since Solectron is so vast and has so many more
growth opportunities to offer.
Q: HOW ABOUT MY SALARY? CAN I EXPECT THAT TO STAY THE SAME?
A: Yes.
Q: WHAT ABOUT BENEFITS LIKE VACATION PAY AND SICK DAYS? CAN WE EXPECT
COMPARABLE BENEFITS?
A: Yes. Human Resources will be holding group meetings to discuss benefits in
further detail.
Q: WILL I HAVE TO COMMUTE TO A DIFFERENT FACILITY?
A: Solectron does not expect that its newest associates will have to commute
to another facility. Solectron has no plans to change what we do here at our
Wilmington headquarters. They like our plant, are impressed by our
state-of-the-art equipment, and see no reason to change this. In fact, Solectron
is talking about increasing capacity in Wilmington, not decreasing it.
Q: WHAT ABOUT CENTENNIAL EMPLOYEES WHO WORK OFF-SITE, LIKE OUR SALES TEAM AND
INTERNATIONAL GROUP?
A: They are expected to remain with the company as well, under the same terms
that affect all employees.
Q: WE ALL HAVE STOCK OPTIONS. HOW AND WHEN WILL WE RECOGNIZE THE VALUE OF OUR
STOCK OPTIONS?
A: Each Centennial stock option converts into 0.536 of a Solectron stock
option. For example, let's suppose you have 100 stock options now at a $5.00
exercise price. At the time of the closing of this transaction, when your
Centennial options become Solectron options, you will have 53 Solectron options
(100 Centennial options x 0.536 = 53 Solectron options) at an exercise price of
$9.33 ($5.00 Centennial exercise price divided by 0.536 equals the $9.33
Solectron exercise price.) (Note: Option share amounts will be rounded down to
the nearest share amount and the exercise price is rounded up to the nearest
cent.)
Q: WHAT'S IN IT FOR OUR CUSTOMERS?
A: This is a win not just for you as employees, but for our customers as well.
They will like the fact that they will continue to get uninterrupted high
quality customized service from the same people who have served them for years -
you - and they will also likely appreciate the added resources and products
available to them through Solectron. If you want to know what to tell customers
when you're talking to them, tell them that they are losing nothing with this
transaction, and gaining plenty.
Q: WHAT WILL HAPPEN TO THE BOARD OF DIRECTORS?
A: Centennial's Board will be disbanded.
Q: SHOULD WE ASSUME THAT THIS A DONE DEAL?
A: No. The transaction still requires Hart Scott Rodino (HSR) approval from
the U.S. government among other regulatory approvals. However, we don't
anticipate any obstacles in gaining such approvals. Furthermore, we have the
full support of Centennial's board and our entire management team. With your
hard work and support, we have been able to turn the company around, which has
resulted in very satisfied customers and 10 consecutive profitable quarters. So,
while the deal is not yet completed, I would ask that you try to remain focused
and continue to provide the same uncompromising service so that we can close the
deal during the second calendar quarter of 2001. As the transaction nears the
close, we will regularly update you.
ADDITIONAL INFORMATION
Solectron intends to file a registration statement on Form S-4 and
Centennial intends to mail a proxy statement/prospectus to its stockholders in
connection with the transaction, each of which will contain information about
the transaction. Investors and security holders are urged to read the
registration statement and the proxy statement/prospectus carefully when they
become available. The registration statement and the proxy statement/prospectus
will contain important information about Solectron, Centennial, the transaction
and related matters, including detailed risk factors. Investors and security
holders will be able to obtain free copies of the registration statement and the
proxy statement/prospectus through the web site maintained by the SEC at
http//www.sec.gov, or by directing a request to Solectron at 777 Gibraltar
Drive, Milpitas, Calif. 95035, Attention: Thomas Alsborg, telephone: (408)
956-6614, or Centennial at 7 Lopez Road, Wilmington, Mass. 01887, Attention
Richard J. Pulsifer, telephone: (978) 805-2323. In addition to the registration
statement and the proxy statement/prospectus, Solectron and Centennial file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Investors and security holders may read and obtain free copies of
any such reports, statements and other information through the web site
maintained by the SEC, or by contacting Solectron and Centennial at the
addresses listed above.
Centennial, its directors and certain of its executive officers may be
considered participants in the solicitation of proxies in connection with this
transaction. Centennial's directors are: William J. Shea, Eugene M. Bullis,
Steven M. DePerrior, Jay M. Eastman, L. Michael Hone, David A. Lovenheim and
John J. Shields. Centennial's executive officers are: L. Michael Hone, President
and Chief Executive Officer; Richard N. Stathes, Executive Vice President -
Worldwide Sales & Marketing; Jacques Assour, Senior Vice President - Operations;
John C. Nugent, Managing Director - Centennial Technologies International
Limited; Richard J. Pulsifer, Vice President, Chief Financial Officer and
Secretary; and Mary A. Gallahan, Vice President - Administration and Human
Resources. Information concerning Centennial' directors and executive officers
can be found in documents filed by Centennial with the SEC. Certain directors
and executive officers of Centennial may have direct or indirect interest in
this transaction due to securities holdings, vesting of options and rights to
severance payments if their employment is terminated following the merger.
Additional information regarding participants in the solicitation will be
contained in the proxy statement/prospectus.