Sanmina-SCI to exit personal computing business
Feb 19, 2008
Sanmina-SCI Corporation (the "Company") (Nasdaq: SANM) announced it has signed a definitive agreement with Foxteq Holdings Inc., a member of Foxconn Technology Group, for the sale of certain assets of its personal computing business and associated logistics services located in Hungary, Mexico and the United States.
Separately, the Company announced that it has entered into a non-binding memorandum of understanding with Lenovo Group Limited to transition responsibility of its Monterrey, Mexico personal computing operation and to sell certain of its related assets to Lenovo.
The Company anticipates that the proceeds from the Foxteq transaction, along with the disposition of certain other related assets associated with, but not included in the Foxteq transaction, will be between $80 and $90 million, depending upon the book value of the assets at the time of closing. Other material terms related to the Foxteq transaction will be disclosed in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission. Further details will be provided during the Company's second quarter fiscal 2008 earnings conference call scheduled in April.
The closing of the Foxteq transaction is subject to customary closing conditions, including regulatory approvals and is expected to close in the Company's third fiscal quarter ending June 28, 2008.
"This announcement is in line with our previous statements that we would sell or otherwise exit the personal computing business because the business is no longer integral to the Company's long-term strategy," stated Jure Sola, Chairman and Chief Executive Officer of Sanmina-SCI.
"Since we announced our intentions to exit the personal computing business, several operating initiatives have allowed us to significantly reduce the net assets invested in this business. Accordingly, we anticipate that the financial benefits of these initiatives along with the total proceeds from these transactions and other related dispositions to be in excess of $200 million," concluded Sola.