Benchmark Electronics Signs Definitive Agreement to Acquire Pemstar
October 17 2006 - 9:00AM
PR Newswire (US)
ANGLETON, Texas, Oct. 17 /PRNewswire-FirstCall/ -- Benchmark
Electronics, Inc. (NYSE:BHE) and Pemstar Inc. (NASDAQ:PMTR) today
announced that they have signed a definitive merger agreement
pursuant to which each outstanding share of Pemstar common stock
will be converted into the right to receive 0.160 of a common share
of Benchmark at transaction close. Based on Benchmark's closing
price of $28.93 on October 16, 2006, the transaction values Pemstar
at $4.63 per common share, or approximately $300 million including
the assumption of Pemstar net debt. The merger is expected to be a
tax-free exchange of common shares. The merger agreement has been
unanimously approved by the boards of directors of both Benchmark
and Pemstar. The transaction, which is subject to the approval of
Pemstar's shareholders, antitrust approvals and other closing
conditions, is expected to close in the first calendar quarter of
2007, subject to the timing of completion of regulatory reviews.
"The combination of the Benchmark/Pemstar organizations brings
together two well respected teams with broad and complementary
customer bases and serving diversified end markets. Pemstar's
customer-focused culture and operating flexibility is highly
compatible with that of Benchmark," said Cary Fu, Benchmark's chief
executive officer. "This acquisition also supports Benchmark's
strategy to continue to expand and deepen its suite of integrated
services and solutions. Pemstar's strengths in design engineering
and systems integration as well as its global footprint complement
our existing growing business. I am confident that the combined
organization will create additional value for our combined base of
customers." "Benchmark's proven track record, strong balance sheet,
and reputation as a global leader in electronics manufacturing
services make the deal an attractive one for Pemstar's customers,
shareholders and employees. This transaction will provide Pemstar
customers with an enhanced portfolio of capabilities, expanded
supply chain and operating leverage and the advantages of an
increased global footprint," said Al Berning, Pemstar's chairman
and chief executive officer. "Our customers will benefit greatly
from Benchmark's capabilities in design engineering, complex
manufacturing and test and repair, as well as expanded low-cost
operations in Asia. There is a strong cultural fit between the two
organizations, which will facilitate a smooth transition and ensure
consistency of ongoing service delivery. The management team and I
strongly support the transaction and the opportunity it provides."
Pemstar was founded in 1994 and is an established leader in the EMS
industry, with Fiscal Year 2006 (March) revenues of $871 million,
including the additional revenue resulting from the full turnkey
operation with a wireless handset customer. Pemstar has a global
footprint of 11 design, manufacturing and fulfillment locations
worldwide and employs approximately 3,500 people. Pemstar provides
a comprehensive range of global engineering, product design,
automation and test, manufacturing and fulfillment services to
customers on a global basis through facilities strategically
located in North America, Asia and Europe. Benchmark Electronics,
Inc. is in the business of manufacturing electronics and provides
its services to original equipment manufacturers of computers and
related products for business enterprises, medical devices,
industrial control equipment, testing and instrumentation products,
and telecommunication equipment. Benchmark's global operations
include facilities in seven countries. Benchmark's common shares
trade on the New York Stock Exchange under the symbol BHE. A
conference call hosted by Benchmark and Pemstar management will be
held on October 17, 2006 at 10:00 am (Central time) to discuss this
announcement. This call will be broadcast via the Internet and may
be accessed by logging on to Benchmark's website at
http://www.bench.com/ or Pemstar's website at
http://www.pemstar.com/. Credit Suisse acted as financial advisor
to Benchmark and Needham & Company, LLC acted as financial
advisor to Pemstar. Cravath, Swaine & Moore LLP acted as legal
advisor to Benchmark and Dorsey & Whitney LLP acted as legal
advisor to Pemstar. Forward-Looking Statements This news release
contains certain forward-looking statements within the scope of the
Securities Act of 1933 and the Securities Exchange Act of 1934. The
words "expect," "estimate," "anticipate," "predict," and similar
expressions, and the negatives of such expressions, are intended to
identify forward-looking statements. Although Benchmark and Pemstar
believe that these statements are based upon reasonable
assumptions, such statements involve risks, uncertainties and
assumptions, including but not limited to industry and economic
conditions, customer actions and the other factors discussed in
Benchmark's Form 10-K for the year ended December 31, 2005,
Pemstar's Form 10- K for the fiscal year ended March 31, 2006, and
Benchmark's and Pemstar's other filings with the Securities and
Exchange Commission (the "SEC"). Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual outcomes may vary materially from those
indicated. Additional Information This communication is not a
solicitation of a proxy from any security holder of Pemstar Inc.
Benchmark Electronics, Inc. intends to file a registration
statement on Form S-4 with the SEC in connection with the proposed
transaction. The registration statement will include a proxy
statement of Pemstar Inc. that also constitutes a prospectus of
Benchmark Electronics, Inc., which will be sent to the shareholders
of Pemstar Inc. Shareholders are urged to read the proxy
statement/prospectus and any other relevant document when they
become available, because they will contain important information
about Benchmark Electronics, Inc., Pemstar Inc. and the proposed
transaction. A definitive proxy statement will be sent to
shareholders of Pemstar Inc. seeking approval of the proposed
transaction. The proxy statement/prospectus and other documents
relating to the proposed transaction (when they are available) can
be obtained free of charge from the SEC's website at
http://www.sec.gov/. These documents (when they are available) can
also be obtained free of charge from Benchmark Electronics, Inc.
upon written request to Benchmark Electronics, Inc., 3000
Technology Drive, Angleton, Texas 77515, or by calling (979)
849-6550, or from Pemstar Inc., upon written request to Pemstar
Inc., 3535 Technology Drive, N.W., Rochester, Minnesota 55901, or
by calling (507) 280-2385. Participants in the Proposed Transaction
Benchmark Electronics, Inc., Pemstar Inc. and certain of their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders in
connection with the proposed transaction under the rules of the
SEC. Information about the directors and executive officers of
Benchmark Electronics, Inc. may be found in its 2005 Annual Report
on Form 10-K filed with the SEC on March 13, 2006 and definitive
proxy statement relating to its 2006 Annual Meeting of Shareholders
filed with the SEC on April 12, 2006. Information about the
directors and executive officers of Pemstar Inc. may be found in
its 2006 Annual Report on Form 10-K filed with the SEC on June 23,
2006 and definitive proxy statement relating to its 2006 Annual
Meeting of Shareholders filed with the SEC on June 30, 2006. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the interests of these
participants will also be included in the proxy
statement/prospectus regarding the proposed transaction when it
becomes available. Non-Solicitation This communication shall not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended. DATASOURCE: Benchmark
Electronics, Inc.; Pemstar Inc. CONTACT: Gayla J. Delly, Chief
financial Officer of Benchmark Electronics, Inc., +1-979-849-6550;
or Greg S. Lea, Chief Financial Officer of Pemstar Inc.,
+1-507-292-6941 Web site: http://www.bench.com/
http://www.pemstar.com/
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