(By Mani) Contract electronics firm Jabil Circuit, Inc. (NYSE: JBL) said it agreed to acquire plastics contract manufacturer Nypro for $665 million to expand its presence in healthcare and consumer packaging markets.
Clinton, Massachusetts-based Nypro with annual sales of $1.2 billion and 12,000 employees operates 20 manufacturing locations in 10 countries serving primarily for healthcare, packaging and consumer/electronics markets.
"The combination with Nypro will extend Jabil's materials manufacturing capabilities into the healthcare and consumer packaging markets as well as add depth to our consumer electronics business," said Timothy Main, Chairman and CEO of Jabil.
The acquisition would also open an exciting new market in packaging for customers in the food and beverage, household and personal care industries. The rigid plastic packaging market is a $140 billion addressable market globally.
The deal is expected to be neutral to slightly accretive to Jabil's core earnings per share for the balance of fiscal 2013 and would boost its fiscal 2014 earnings.
Completion of the transaction, which is subject to customary closing conditions, is currently expected to take place during Jabil's fiscal third quarter.
The deal comes days after Jabil reshuffled its top management as it promoted senior executives William Peters and William Muir Jr. to president and chief operating officer, respectively. Both appointments are effective March 1 when Mark Mondello, current chief operating officer would assume the CEO role, succeeding Timothy Main.
St. Petersburg, Florida-based Jabil is an electronic product solutions company providing comprehensive electronics design, manufacturing and aftermarket product management services to global electronics and technology companies. The key factor that works in favor of Jabil is that it builds the products, allowing customers to develop the products rather than building it. The cost advantage also gets customers for Jabil.