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PRESS RELEASE
JANUARY 26, 2001
SANMINA MAKES A RECOMMENDED EXCHANGE OFFER TO THE SHAREHOLDERS OF SEGERSTROM &
SVENSSON
COMBINATION WITH LEADING INTERNATIONAL SUPPLIER OF INTEGRATED ENCLOSURE SYSTEMS
FURTHER EXPANDS SANMINA'S TOTAL MANUFACTURING SOLUTIONS CAPABILITY
- - SANMINA CORPORATION ("SANMINA") (NASDAQ NM: SANM), ONE OF THE WORLD'S LEADING
ELECTRONICS CONTRACT MANUFACTURERS, MAKES A RECOMMENDED EXCHANGE OFFER ("THE
OFFER") TO THE SHAREHOLDERS AND HOLDERS OF CONVERTIBLE DEBENTURES OF AB
SEGERSTROM & SVENSSON ("SEGERSTROM"). THE TOTAL VALUE OF THE PUBLIC OFFER IS
APPROXIMATELY SEK 4,855 MILLION.
- - THE BOARD OF DIRECTORS OF SEGERSTROM UNANIMOUSLY RECOMMENDS THE SHAREHOLDERS
AND HOLDERS OF CONVERTIBLE DEBENTURES IN SEGERSTROM TO ACCEPT THE OFFER.
- - THE COMBINED ENTITY WILL FORM ONE OF THE LEADING ELECTRONIC MANUFACTURING
SERVICES PROVIDERS TO ORIGINAL EQUIPMENT MANUFACTURERS IN THE COMMUNICATIONS,
MEDICAL AND INDUSTRIAL INSTRUMENTATION, AND HIGH-SPEED COMPUTER SECTORS.
SEGERSTROM WILL STRENGTHEN ITS CUSTOMER OFFERING BY BECOMING PART OF A GLOBAL
NETWORK WITH SOLID FINANCIAL STRENGTH AND A STRONG GLOBAL CUSTOMER BASE.
- - SANMINA IS OFFERING THE SHAREHOLDERS AND HOLDERS OF CONVERTIBLE DEBENTURES TO
EXCHANGE THEIR SHARES AND CONVERTIBLE DEBENTURES IN SEGERSTROM FOR NEWLY
ISSUED SHARES OF SANMINA. THE NUMBER OF NEWLY ISSUED SANMINA SHARES OFFERED
WILL HAVE A VALUE EQUIVALENT TO SEK 180 FOR EACH SEGERSTROM SERIES B SHARE
AND SERIES A SHARE AND FOR EACH CONVERTIBLE DEBENTURE WITH A NOMINAL VALUE OF
SEK 90.10.
- - THE OFFER REPRESENTS A PREMIUM OF APPROXIMATELY 72% FOR SEGERSTROM SERIES B
SHARES OVER THE LAST CLOSING PRICE, ON JANUARY 24, 2001 ON THE OM STOCKHOLM
EXCHANGE. COMPARED TO THE AVERAGE CLOSING PRICE OF SEGERSTROM SERIES B SHARES
DURING THE LAST THIRTY TRADING DAYS, THE OFFER REPRESENTS A PREMIUM OF
APPROXIMATELY 65%.
- - Sanmina has received undertakings from Daga Celsing, Johan Norman and Magnus
Norman ("the Principal Shareholders") to tender in the Offer their Segerstrom
shares, owned directly and indirectly by them, corresponding to approximately
71% per cent of the voting rights and 22% of the share capital of Segerstrom.
Comments from the Chairmen of the Board of Directors of Sanmina and
Segerstrom
Sanmina, a leading electronics contract manufacturer, today announced its
intention to make an exchange offer to acquire all of the shares of Segerstrom,
a leading global supplier of integrated enclosure systems to the communications
sector.
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Jure Sola, Sanmina's Chairman and Chief Executive Officer, said, "We are very
pleased to announce this transaction. Segerstrom is a highly respected
integrated enclosure systems manufacturer with 12 state-of-the-art,
ISO-certified manufacturing facilities in Sweden, Finland, Brazil, Hungary,
Scotland, and the United States. The transaction expands our global footprint as
well as our enclosure systems capabilities, further strengthening Sanmina's
industry leading position in providing our customers with a total manufacturing
solution."
Christer Zetterberg, Chairman of the Board of Segerstrom, said, "We believe
Sanmina, a leading electronics contract manufacturer, is the ideal partner for
us to continue to support our customers and meet their demand for advanced
engineering, flexible manufacturing, quality products and short lead times. In
addition, Sanmina's solid financial strength and commitment to leading-edge
technology will provide a solid platform for long term growth."
Background and reasons for the merger
The market for electronic manufacturing services ("EMS") has experienced rapid
growth over the past ten years. Sanmina has benefited from original equipment
manufacturers ("OEM") reducing their in-house manufacturing operations in favor
of third party manufacturing specialists. At the same time, OEM customers have
increased their demands on EMS specialists to provide cost reductions, advanced
technologies, global manufacturing capabilities and the ability to manufacture
complete systems, thus making it necessary for EMS specialists to offer a broad
range of services on a global basis.
During the past five years, Sanmina has increased its revenue from USD 1 billion
to USD 3.9 billion, corresponding to an average revenue growth of approximately
41 percent per year. Sanmina has pursued and intends to continue to pursue
business acquisition opportunities to access new customers, technologies or
geographic markets; to implement Sanmina's end to end total manufacturing
solution strategy; and to increase capacity. Sanmina believes a merger between
Sanmina and Segerstrom will create an opportunity for both companies to continue
to achieve growth and a higher market profile.
In addition, Sanmina believes that the ability to provide a "total manufacturing
solution" is a key competitive advantage in the EMS marketplace. Sanmina's
vertical integration allows it to provide a full range of manufacturing
services, including engineering design, the fabrication of bare boards,
backplane assembly, printed circuit board assembly, cable assembly, electronic
enclosure manufacturing and complete system integration and global order
fulfillment. This "one-stop" manufacturing solution gives Sanmina greater
control over quality, delivery and cost. Sanmina believes that enclosure systems
are an important part of the total manufacturing solution and that the
combination of Sanmina and Segerstrom will allow both companies to leverage
complementary technologies and accelerate international growth. In addition,
Sanmina believes that the combination will strengthen Sanmina's relationships
with a number of leading OEMs in the communications industry.
Strategic implications and effects of the merger
Through the proposed merger, Sanmina intends to strengthen its position as one
of the leading global providers of EMS services. Similarly, by combining with
Sanmina, Segerstrom will be a part of a leading multinational EMS supplier,
increased customer opportunities and a global infrastructure. Sanmina believes
that the merger will result in the following benefits:
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> Key service offering added in Europe. Sanmina seeks to build an integrated
EMS operation in Europe. Sanmina believes that much of the success it has
achieved in the North American market is due to its integration of key
technologies essential to the high-end market, and a key element of
Sanmina's growth strategy for Europe is to replicate this successful
integration model. As a result of the merger, Sanmina will have enclosure
manufacturing capability in the Nordic region, Hungary and the United
Kingdom. This new enclosures capability will contribute to the integration
of Sanmina's existing EMS operations in the Nordic region, Ireland and
France, as well as Sanmina's jointly owned printed circuit board
manufacturing operation in Germany. By combining with Segerstrom, Sanmina
will gain a major European presence in enclosure manufacturing and will
increase its ability to offer customers in Europe a total manufacturing
solution including printed circuit board fabrication, enclosure
manufacturing, printed circuit board assembly and system integration.
> Improved market position for the combined company's enclosure systems
business. Upon the completion of the transaction, Sanmina will be one of the
leading global manufacturers of electronics enclosures, with enclosure
manufacturing facilities in North America, Europe and South America. Sanmina
currently has a well-established enclosure systems business in North
America, while Segerstrom's principal enclosure operations are in Europe and
South America.
> Strengthened customer base and increased ability to market across customer
bases. Through the proposed transaction, Sanmina intends to strengthen its
customer base within the high growth communications industries. Principal
customers of Sanmina and Segerstrom currently include Alcatel, Cisco
Systems, Ericsson, Lucent, Motorola, Nokia, Nortel Networks and Siemens.
Sanmina believes that the increased enclosure manufacturing strength of the
combined company will expand their capability to provide a total systems
solution to their respective base of customers.
> Increased international presence and competitiveness. Many of the global
electronics industry OEMs are increasingly requiring their suppliers to have
a global presence, with manufacturing facilities located in close proximity
to the OEM's operations. As a result, Sanmina believes that an expanded
global presence in key locations for the electronics industry is important
to Sanmina's future growth. After the merger, Sanmina would have
approximately 27,000 full-time employees, 65 manufacturing sites and
operating facilities in 13 countries on four continents.
> Combination with a global, integrated EMS company. For Segerstrom, whose
operations consist primarily of enclosure manufacturing facilities that are
concentrated primarily in Europe, the transaction represents an opportunity
to become part of a global, integrated EMS company. This combination will
better position Segerstrom to compete in the global EMS market, which is
becoming increasingly dominated by large, global suppliers that are capable
of providing a full range of EMS services to their customers. In addition,
Sanmina will support Segerstrom with its information systems which are
integrated globally across Sanmina's facilities.
The Offer
Sanmina is offering shareholders and holders of convertible debentures in
Segerstrom to exchange their shares and convertible debentures in Segerstrom for
newly issued shares of Sanmina. The number of Sanmina shares offered for each
Segerstrom Series A and Series B share and each convertible debenture with a
nominal value of SEK 90.10 will have a value equivalent to SEK 180.
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The number of new shares to be issued as consideration by Sanmina to the
shareholders and holders of convertible debentures in Segerstrom pursuant to the
Offer will be determined as follows. The aggregate consideration for all shares
and convertible debentures in Segerstrom of approximately SEK 4,855 million
corresponds to approximately USD 511 million (based on a SEK/USD exchange rate
of 9.51, which exchange rate will be used in the exchange calculation in the
Offer). This USD amount will then be divided by the average closing price of
Sanmina shares (common stock) on the NASDAQ National Market for a period of six
trading days starting and including January 23, 2001 and ending and including
January 30, 2001. The last day of the acceptance period is expected to be on
February 21, 2001. No commission will be charged in the Offer.
Example illustrating the calculation of the exchange ratio
- --------------------------------------------------------------------------------
Based on the closing price of Sanmina common stock on NASDAQ National Market on
January 24, 2001 of USD 51.5625, and using the SEK/USD exchange rate of 9.51,
0.3671 Sanmina shares would have been exchanged for each Series A or Series B
share, or each convertible debenture in Segerstrom.
- --------------------------------------------------------------------------------
Each shareholder or holder of convertible debentures in Segerstrom who tenders
its shares or convertible debentures will be offered to sell its shares in
Sanmina through a simplified sale process. In the simplified sale process,
shares in Sanmina issued in consideration to holders of Segerstrom shares and
convertible debentures will be sold on the NASDAQ National Market through a U.S.
securities broker. The proceeds, net of any costs of sale, will be divided
equally among the Sanmina shares sold through this process and will be paid to
the selling shareholders and holders of convertible debentures following the
completion of the sale of all Sanmina shares in respect of which an application
to sell has been made. Further details on the terms of the simplified sale
process will be provided in the prospectus. Since the Sanmina shares will not be
registered directly on Swedish VP-accounts, shareholders and holders of
convertible debentures in Segerstrom that wish to keep the Sanmina shares
received in the Offer must have a custody account with a bank or securities
firm.
No fractional shares will be distributed in the Offer. Rather, to the extent a
Segerstrom shareholder or holder of convertible debentures is entitled to
receive fractions of shares in Sanmina, an amount equivalent to the value of
such fractions of shares will be paid in cash. Further details on the terms will
be provided in the prospectus.
The Segerstrom Series B share is listed on the Attract 40 list of the OM
Stockholm Exchange. The last closing price on January 24, 2001 was SEK 104.5.
The offer represents a premium of approximately 72 percent over the last closing
price of the Segerstrom Series B share. Compared to the average closing price of
the Segerstrom Series B share during the last thirty trading days prior to the
announcement of the Offer of SEK 108.93, the Offer represents a premium of 65
percent. The Series A shares and convertible debentures in Segerstrom are not
listed.
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Sanmina common stock trades only on the NASDAQ National Market in the United
States, under the symbol NASDAQ NM: SANM. At the present time, Sanmina does not
plan to list the Sanmina share on the OM Stockholm Exchange. At the date hereof,
neither Sanmina nor any of its affiliates owns or controls any Segerstrom shares
or convertible debentures.
Conditions for the Offer
The Offer is conditional upon the following:
that the Offer is accepted to such an extent that Sanmina becomes the owner
of Segerstrom shares and convertible debentures representing more than
90 percent of both the total number of shares and total number of votes
on a fully diluted basis in Segerstrom, provided however that Sanmina
reserves the right to complete the Offer at a lower level of acceptance;
that a written pooling opinion is delivered to Sanmina by Arthur Andersen LLP
stating in substance that the Offer will qualify as a pooling of
interest transaction under Opinion 16 of the Accounting Principles Board
of the United States and regulations of the United States Securities and
Exchange Commission, and that a written opinion is delivered to
Segerstrom by Deloitte & Touche LLP stating that no conditions exist
that would preclude Segerstrom's ability to be a party in a business
combination with Sanmina to be accounted for as a pooling of
interest.(1)
that all necessary authority decisions, consents and the like, including
clearance from appropriate competition authorities(2), for the Offer and
acquisition of Segerstrom are given without restrictions or, where
applicable, on terms that do not, in the opinion of Sanmina, materially
and adversely affect the Offer and acquisition of Segerstrom; and
that before an announcement is made by Sanmina that the Offer will be
completed, there are no circumstances which, in Sanmina's opinion, would
prevent, substantially delay or make substantially more difficult the
Offer or the acquisition of Segerstrom contemplated thereby due to
legislation, legal rulings, decisions by public authorities or the like
in Sweden, the United States or elsewhere, which exist or are
anticipated at the time an assessment is made, or by other circumstances
beyond the control of Sanmina.
- --------
(1) Sanmina has received verbal advice from its auditors Arthur Andersen
LLP and Segerstrom has received verbal advice from its auditors Deloitte &
Touche LLP that the respective auditors will be able to issue the written
opinions described above.
(2) Merger control notifications will be filed with the European Commission
and the Brazilian Competition Authorities.
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Sanmina reserves the right to waive, in whole or in part, one or more of the
conditions, in full or in part, for the Offer.
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Recommendation from the Board of Directors of Segerstrom and undertakings
The Board of Directors of Segerstrom unanimously recommends its shareholders and
holders of Segerstrom convertible debentures to accept the Offer, and to
exchange their shares and convertible debentures in Segerstrom for newly issued
shares in Sanmina.
Sanmina has received undertakings from the Principal Shareholders, owning
5,077,500 Series A shares and 780,700 Series B shares, representing
approximately 71 percent of the votes and approximately 22 percent of the
capital, to tender in the Offer their Segerstrom shares owned directly or
indirectly by them.
Pro forma financial summary for Sanmina after the transaction with Segerstrom
The preliminary unaudited pro forma financial statements for Sanmina after the
transaction with Segerstrom have been prepared in accordance with United States
GAAP. The financial information is based on the annual report for Sanmina for
the financial year ending September 30, 2000 and the pro forma financial
statements for Segerstrom for the 12 months ending September 30, 2000. The
unaudited pro forma figures for Sanmina after the transaction with Segerstrom do
not include any synergy effects arising as a consequence of the merger. The
transaction is intended to be accounted for as a pooling of interests.
TWELVE MONTHS ENDING SEPTEMBER 30, 2000
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USD MILLION SEGERSTROM SANMINA AFTER
SANMINA UNAUDITED PRO FORMA THE TRANSACTION
SUMMARY - INCOME STATEMENTS ACTUAL US GAAP ADJUSTMENTS UNAUDITED PRO FORMA
- --------------------------- ------- ---------- ----------- -------------------
Net sales 3 911 308 -1 4 218
Cost of sales -3 283 -266 1 -3 548
------- ------- ------- -------
Gross profit 628 42 670
------- ------- -------
Operating expenses -297 -16 -313
------- ------- -------
Operating income 331 26 357
------- ------- -------
AT SEPTEMBER 30, 2000
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USD MILLION SEGERSTROM SANMINA AFTER
SANMINA UNAUDITED PRO FORMA THE TRANSACTION
SUMMARY - BALANCE SHEETS ACTUAL US GAAP ADJUSTMENTS UNAUDITED PRO FORMA
- --------------------------- ------- ---------- ----------- -------------------
Goodwill 319 28 347
Fixed assets 736 44 780
Current assets 1 591 105 1 696
Cash and cash equivalents 993 3 996
------- ------- -------
Total assets 3 639 180 3 819
------- ------- -------
Equity 1 701 31 11 1 743
Interest bearing debt 1 156 79 -19 1 216
------- ------- ------- -------
Non interest bearing debt 782 70 8 860
------- ------- ------- -------
Total shareholders' equity and liabilities 3 639 180 3 819
------- ------- -------
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Preliminary timetable
A prospectus is expected to be made public and distributed to the shareholders
of Segerstrom on or about January 29, 2001. A press release regarding the final
exchange ratio will be distributed on January 31, 2001. The acceptance period is
planned from January 31, 2001 to February 21, 2001. The settlement date is
expected to be on or about March 1, 2001. Sanmina, however, reserves the right
to extend the acceptance period and thus postpone the settlement date.
MEDIA AND ANALYST CONFERENCE
Conferences will be held in Stockholm on January 26, 2001 as follows:
Media and analyst conference: A press and analyst conference will be held at
Hotel Sergel Plaza, Brunkebergstorg 9 in Stockholm
at 1.00 PM CET.
Telephone conference: A telephone conference will be held at
2.30 PM CET. Please call
+1 (703) 871 3026 for registration to the
telephone conference.
Carnegie acts as financial advisor to Sanmina in this transaction and Enskilda
Securities as financial advisor to Segerstrom.
SAN JOSE, JANUARY 26, 2001
SANMINA CORPORATION
The Board of Directors
For further inquires, please contact:
At Sanmina:
Rick Ackel
Executive Vice President, Chief Financial Officer
+1 (408) 964 3613
Paige Bombino
Corporate Communications
+1 (408) 964-3610
At Segerstrom:
Christer Zetterberg
Chairman of the Board of Directors
46 708 24 25 26
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ABOUT SANMINA
Founded in 1980, Sanmina is a leading global contract manufacturer providing a
full spectrum of vertically integrated services to the fastest growing segments
of the electronics manufacturing services market. Sanmina's unique total
manufacturing solution, which encompasses engineering design, fabrication of
printed circuit boards, cable assemblies, enclosures, complete system
integration and test as well as global order fulfillment, provides customers
with quality products and services on a quick-turn, cost effective basis.
Sanmina provides these services to a diversified base of leading OEMs in the
communications, industrial and medical instrumentation and computer sectors of
the electronics industry. As a result of its position in the rapidly growing
outsourcing market, Sanmina has consistently achieved record operating results
and industry-leading returns.
For its fiscal year ended September 30, 2000, Sanmina reported revenues of USD
3.9 billion, an increase of 63 percent over the prior year. Excluding
non-recurring charges, Sanmina reported net income for the year of USD 259.4
million, up 77 percent from USD 146.5 million in the prior year. Including these
charges, Sanmina reported net income of USD 192.3 million. Sanmina has over
24,000 employees and over 50 manufacturing facilities in ten countries.
Sanmina common stock trades on the Nasdaq National Market under the symbol:
NASDAQ NM: SANM. Information regarding Sanmina can be found on its World Wide
Web page located at http://www.sanmina.com.
ABOUT SEGERSTROM
Segerstrom is an international group engaged in the development, manufacture and
distribution of advanced enclosure systems for the communications industry. With
world-leading quality processes for product development, manufacture, system
integration and logistics, together with international presence, Segerstrom is
the clear choice when selecting a partner for development projects and long-term
relations. Examples of areas of application for Segerstrom's enclosure systems
are radio base stations, and public and company telephone exchanges.
Approximately 80 percent of the Group's deliveries of enclosure systems are for
applications within mobile telephony and the Internet. Major customers include
Allgon, Ericsson, Lucent, Motorola and Nokia.
For the nine months ended September 30, 2000 Segerstrom Group reported revenues
of SEK 2.1 billion, an increase from SEK 1.3 billion the same period last year.
Over the same period, the group achieved a net income of SEK 123 million. The
Segerstrom Group has approximately 2,000 employees in Sweden, Finland, Brazil,
Belgium, Hungary, Scotland and the USA.
Segerstrom series B shares are traded on the Attract 40 list of the OM Stockholm
Exchange under the symbol: SEGE B. Information regarding Segerstrom can be found
on its World Wide Web page located at http://www.segerstrom.se.
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