Simpsonville-based KEMET Corp., a global supplier of passive electronic components, announced Thursday that it has signed a definitive agreementto complete the acquisition of NEC Tokin from the NEC Corporation. The acquisition will occur through KEMET’s subsidiary KEMET Electronics Corporation (KEC) .
NEC Tokin, a manufacturer of electronic components, is headquartered in Shendai-Shi, Japan.
KEC will pay NEC 6 billion yen (approximately $52.5 million), plus half of the “excess amount” of net cash proceeds from the sale of a division of NEC Tokin, said KEMET officials. KEMET is targeting an April 10 closing date, after which NEC Tokin will change its name to Tokin Corporation and become a wholly-owned subsidiary of KEMET.
As part of the transaction, NEC Tokin plans to sell its electromechanical devices (EMD) division to NTJ Holdings for approximately 48.2 billion yen (approximately $422 million). The proceeds of the sale will be used to repay an NEC intercompany debt, “resulting in an essentially debt-free balance sheet of NEC Tokin once it is acquired by KEMET,” according to KEMET officials. KEMET will pay one-half of the remaining “excess” amount from the sale of the EMD business to NEC.
NTJ Holdings is owned by funds managed by Japan Industrial Partners Inc.
“Our improved balance sheet position, combined EBITDA, and leverage statistics should enable us to refinance our existing debt at improved interest rates, resulting in less cash interest expense and providing additional earnings per share for our shareholders,” said KEMET CEO Per Loof in a statement.
NEC Tokin has manufacturing facilities and offices throughout Japan, as well as in Thailand, Singapore, Vietnam, Philippines, Hong Kong, Taiwan, Korea, Shanghai, Germany, and France, and in the U.S. in Chicago, Austin, and San Jose, according to its website.