Jabil-Nypro Deal Closing Delayed
Reporting its second-quarter fiscal year 2013 financial results, Jabil Circuit Inc. said its acquisition of Clinton-based Nypro would likely take longer than originally expected.
When the $665-million deal was announced last month, the expectation was that it would be complete by late May. However, Jabil's CEO, Mark T. Mondello, said in a statement that the company looks forward to completing the deal in its fourth quarter, which ends Aug. 31.
Jabil spokeswoman Beth Walters said the anticipated delay is due to clearances the company needs from several countries, including China, Russia and Hungary. The deal has already been approved by the United States and Germany, she said, with the other approvals expected soon. However, it's unclear when China will sign off.
Walters cited new government leadership there as one of the reasons for the delay.
"It's the one that's most uncertain and unknowable," Walters said of China. "Other than that, everything is going along in a timely basis."
She said the required two-thirds vote for approval by Nypro employees, who own the company, is underway and scheduled to be complete March 28, which will be followed by a shareholder's meeting.
Walters said Jabil plans to close the deal early in the fourth quarter.
Reflecting on Jabil's second quarter, which ended Feb. 28, Mondello said, "During the quarter we made great progress on the Nypro acquisition and believe the market opportunities of our combined capabilities are considerable."
Mondello said Jabil is pleased with its financial results for the quarter.
The St. Petersburg, Fla.-based provider of precision plastics products reported revenue of 4.3 percent increase in revenue for the quarter, up to $4.4 billion over the same period in 2012.
Net income for the quarter was $88.5 million, or 43 cents per share, down from $98.2 million, or 46 cents, in 2012.
The company said its diversified manufacturing services grew 11 percent while enterprise and infrastructure segments increased 12 percent. However, its high velocity segment dropped 15 percent. The company said it expects the first two segments to stay consistent in the third quarter, while high velocity increases 13 percent.
Jabil also said its acquisition-related expenses were $5 million above its second-quarter forecast because it had expected the cost to be incurred during the third quarter.
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