Merix to acquire operations of Eastern Pacific Circuits Limited for $120M

Merix Corporation announced that it has signed a definitive agreement to acquire the operations of Eastern Pacific Circuits Limited (EPC), a Hong Kong based supplier of printed circuit boards. The purchase price is $120.0 million cash at closing plus earn-out consideration of up to $8.0 million based on calendar 2005 adjusted EBITDA. Merix intends to finance the transaction with a combination of available cash and debt. The transaction is expected to close in June 2005.

The EPC operations include four manufacturing plants in southern China and one in Hong Kong. EPC is a low cost, mid to high volume supplier of printed circuit boards to a global customer base in the high-end computer, communications, consumer, industrial and automotive end markets. EPC operates 869,000 square feet of manufacturing space and has high volume capabilities up to 18 layers. EPC has sales and customer service offices in the U.S., Canada, U.K., China, Singapore and Hong Kong. For the year ended December 31, 2004, EPC's preliminary unaudited sales were $143.0 million and adjusted EBITDA was $14.1 million.

Commenting on the transaction, Mark Hollinger, Chairman and Chief Executive Officer of Merix Corporation, said, "This is a major event for Merix -- the EPC acquisition creates a strong platform in Asia to further support our existing customer base, introduce our technology to new customers in the region, offer a diverse range of products, and reduce our overall cost structure. The acquisition provides Merix with a strategic combination of well-located manufacturing operations, a seasoned management team, and an expanded customer base which diversifies our end markets. We expect to leverage EPC's sales and manufacturer's representative channels and pursue cross-selling opportunities for our quick-turn business. We believe this combination will provide opportunities for both sales and cost synergies as we capitalize on technology and quick-turn capabilities in the United States and low-cost operations in Asia. This is a very exciting transaction and we believe it significantly enhances our position as a world class global competitor in the printed circuit board industry."

Jerry Rodrigues, Chief Executive Officer of EPC, stated "The entire EPC team has the highest regard for Merix and its reputation for advanced technology, quick-turn capabilities, and customer service. We are very pleased to join with Merix and to bring an experienced management team and a well-trained workforce to help Merix execute its strategies to become a leading provider of printed circuit boards on a global basis."