(By Balaseshan) CTS Corp. (NYSE: CTS), a manufacturer of electronic components and sensors, said it has closed the sale and leaseback of its Singapore facility for proceeds in excess of the underlying book value.
CTS received net cash proceeds of about $17.5 million. An estimated $10 million of the total $14.5 million pre-tax gain will be recognized in the fourth quarter with the residual gain recorded as a deferred liability on the balance sheet.
CTS sold its 159,000 square foot Singapore facility and leased back about 57,000 square feet for its streamlined electronic components operation. CTS has been manufacturing high quality electronic components in the Singapore facility since 1979.
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The transaction includes a lease agreement with an initial term of three years, plus renewal options.
As stated in third quarter earnings release, CTS is taking a number of initiatives in 2012 to improve its manufacturing efficiency and has reduced its global manufacturing floor space requirements.
"As a result, the sale and leaseback transaction for the Singapore facility has brought in significant cash proceeds to fund future growth initiatives and reduce operating costs going forward," said Vinod Khilnani, CTS Chairman and Chief Executive Officer.
CTS is a designer and manufacturer of electronic components and sensors and a provider of electronics manufacturing services (EMS) to OEMs in the automotive, communications, medical, defense and aerospace, industrial and computer markets. CTS manufactures products in North America, Europe and Asia.
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CTS is trading down 0.53% at $9.39 on Tuesday. The stock has been trading between $7.66 and $11.22 for the past 52 weeks.