Kimball Electronics Completes the Divestiture of its Automation, Test, and Measurement Business; Enhancing the Company’s Strategic Focus on Core Electronics Manufacturing Services
Kimball Electronics (Nasdaq: KE) has completed the divestiture of its Automation, Test, and Measurement (AT&M) business to Averna Technologies Inc. on July 31, 2024. The proceeds will support organic growth, debt reduction, and share repurchases. CEO Richard D. Phillips stated that while they enhanced AT&M capabilities since acquiring Global Equipment Services (GES) in 2018, it wasn't a strategic fit for Kimball. The company will now focus on core Electronics Manufacturing Services (EMS) operations. Averna's CEO, Francois Rainville, welcomed the addition, which strengthens their position in automation, test, and measurement globally. B. Riley Securities acted as the exclusive financial advisor for the transaction.
Kimball Electronics (Nasdaq: KE) ha completato la dismissione della sua attività di Automazione, Test e Misurazione (AT&M) a Averna Technologies Inc. il 31 luglio 2024. I proventi supporteranno la crescita organica, la riduzione del debito e il riacquisto di azioni. Il CEO Richard D. Phillips ha dichiarato che, nonostante abbiano migliorato le capacità di AT&M da quando hanno acquisito Global Equipment Services (GES) nel 2018, non era un'operazione strategica per Kimball. L'azienda si concentrerà ora sulle sue operazioni principali nei Servizi di Produzione Elettronica (EMS). Il CEO di Averna, Francois Rainville, ha accolto l'integrazione, che rafforza la loro posizione nell'automazione, nei test e nella misurazione a livello globale. B. Riley Securities ha agito come consulente finanziario esclusivo per la transazione.
Kimball Electronics (Nasdaq: KE) ha completado la desinversión de su negocio de Automatización, Pruebas y Medición (AT&M) a Averna Technologies Inc. el 31 de julio de 2024. Los ingresos apoyarán el crecimiento orgánico, la reducción de deuda y la recompra de acciones. El CEO Richard D. Phillips declaró que, aunque han mejorado las capacidades de AT&M desde la adquisición de Global Equipment Services (GES) en 2018, no era una adaptación estratégica para Kimball. La compañía ahora se enfoca en sus operaciones principales de Servicios de Fabricación Electrónica (EMS). El CEO de Averna, Francois Rainville, dio la bienvenida a la adición, que fortalece su posición en automatización, pruebas y medición a nivel mundial. B. Riley Securities actuó como asesor financiero exclusivo para la transacción.
김벌 전자 (Nasdaq: KE)는 2024년 7월 31일 아베르나 테크놀로지스와 자동화, 테스트 및 측정 (AT&M) 사업부 매각을 완료했습니다. 이 수익금은 유기적 성장, 부채 감소 및 자사주 매입을 지원할 것입니다. CEO 리처드 D. 필립스는 2018년 글로벌 장비 서비스 (GES)를 인수한 이후 AT&M 능력을 향상시킨 반면, 그것이 김벌에게 전략적으로 맞지 않았다고 밝혔습니다. 이 회사는 이제 전자 제조 서비스 (EMS) 운영에 집중할 것입니다. 아베르나의 CEO인 프랑수아 레인빌은 이 추가 사항이 전 세계 자동화, 테스트 및 측정 분야에서 자신의 입지를 강화한다고 환영했습니다. B. 라일리 증권사는 거래의 독점 재무 자문사로 활동했습니다.
Kimball Electronics (Nasdaq: KE) a complété la cession de son activité Automatisation, Test et Mesure (AT&M) à Averna Technologies Inc. le 31 juillet 2024. Les revenus soutiendront la croissance organique, la réduction de la dette et les rachats d'actions. Le PDG Richard D. Phillips a déclaré que, bien qu'ils aient renforcé les capacités d'AT&M depuis l'acquisition de Global Equipment Services (GES) en 2018, cela ne correspondait pas à la stratégie de Kimball. L'entreprise se concentrera désormais sur ses opérations de Services de Fabrication Électronique (EMS). Le PDG d'Averna, Francois Rainville, a salué cette addition, qui renforce leur position dans l'automatisation, le test et la mesure à l'échelle mondiale. B. Riley Securities a agi en tant que conseiller financier exclusif pour la transaction.
Kimball Electronics (Nasdaq: KE) hat am 31. Juli 2024 die Veräußertung seiner Automatisierungs-, Test- und Messtechnik-Sparte (AT&M) an Averna Technologies Inc. abgeschlossen. Die Erlöse werden das organische Wachstum, die Schuldenreduzierung und die Aktienrückkäufe unterstützen. CEO Richard D. Phillips erklärte, dass sie zwar die AT&M-Fähigkeiten seit der Übernahme von Global Equipment Services (GES) im Jahr 2018 verbessert haben, jedoch nicht strategisch zu Kimball passten. Das Unternehmen wird sich nun auf die Kerngeschäfte im Bereich Elektronikfertigungsdienste (EMS) konzentrieren. Der CEO von Averna, Francois Rainville, begrüßte die Übernahme, die ihre Position in der Automatisierung, Prüfung und Messung weltweit stärkt. B. Riley Securities fungierte als exklusiver Finanzberater für die Transaktion.
- Divestiture allows Kimball Electronics to focus on core EMS operations
- Proceeds from sale to be used for organic growth, debt reduction, and share repurchases
- Strategic realignment potentially improves long-term growth opportunities
- Loss of diversification and potential revenue stream from AT&M business
Insights
The divestiture of Kimball Electronics' Automation, Test and Measurement (AT&M) business marks a significant strategic shift for the company. This move allows Kimball to refocus on its core Electronics Manufacturing Services (EMS), which could potentially lead to improved operational efficiency and profitability.
The sale proceeds will be allocated to three key areas: supporting organic growth, reducing debt and repurchasing shares. This balanced approach suggests a prudent financial strategy:
- Organic growth investment could enhance Kimball's competitive position in the EMS market.
- Debt reduction may improve the company's balance sheet and financial flexibility.
- Share repurchases could potentially boost earnings per share and signal management's confidence in the company's future.
However, investors should note that divesting a business can sometimes lead to short-term revenue declines. It will be important to monitor Kimball's future financial reports to assess the impact of this divestiture on overall performance.
From a market perspective, this move aligns Kimball more closely with pure-play EMS providers, which could potentially lead to a re-rating of the stock if the market views the increased focus positively. The success of this strategy will largely depend on Kimball's ability to capitalize on growth opportunities in its core EMS business.
Kimball Electronics' decision to divest its AT&M business reflects broader trends in the technology manufacturing sector. Many companies are streamlining their operations to focus on core competencies, especially in the face of global supply chain challenges and increasing competition.
The sale to Averna Technologies is particularly noteworthy. Averna, as a specialized test and quality solution integrator, is likely better positioned to maximize the value of the AT&M business. This could lead to enhanced innovation and competitiveness in the automation and testing sector, benefiting customers in industries such as aerospace, automotive and medical devices.
For Kimball, this divestiture allows for a sharper focus on EMS, which could be important in an industry where specialization often leads to competitive advantages. The EMS market is expected to grow significantly, driven by trends such as:
- Increasing outsourcing of electronics manufacturing by OEMs
- Rising demand for IoT devices and smart electronics
- Growth in sectors like automotive electronics and medical devices
By concentrating resources on EMS, Kimball may be better positioned to capitalize on these trends. However, the company will need to demonstrate its ability to win new contracts and expand its market share in a competitive landscape to fully justify this strategic shift.
Kimball Electronics entered the automation, test, and measurement industry with the acquisition of Global Equipment Services, Inc. (GES) in 2018. In May 2024, it announced that AT&M had been classified as a business held for sale. AT&M provides advanced testing and inspection solutions for manufacturers in the industrial, medical, consumer electronics, and semiconductor sectors.
Commenting on today’s announcement, Richard D. Phillips, Chief Executive Officer of Kimball Electronics, stated, “While we have made significant strides enhancing our capabilities in AT&M since the acquisition of GES, we determined that it is not a good strategic fit for Kimball and that focusing on core EMS operations aligns best with strategic priorities and longer-term growth opportunities for the Company. AT&M will be well-positioned under new ownership with expertise in testing and measurement, broad industry knowledge, and established client relationships. We thank the team for their contributions and wish them success moving forward.”
“The addition of the GES team, and its footprint in Silicon Valley and
B. Riley Securities acted as the exclusive financial advisor on the transaction.
About Kimball Electronics, Inc.
Kimball Electronics is a global, multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in
To learn more about Kimball Electronics, visit www.kimballelectronics.com.
Lasting relationships. Global success.
About Averna
As a global test & quality solution integrator, Averna partners with product designers, developers, and OEMs to help them achieve higher product quality, accelerate time to market and protect their brands. Founded in 1999, Averna offers specialized expertise and innovative test, vision inspection, precision assembly and automated solutions that deliver substantial technical, financial and market benefits for clients in the aerospace, automotive, consumer electronics, energy, industrials, medical devices & life sciences, semiconductor, telecom and other industries. Averna has offices around the world, numerous industry certifications such as ISO 9001:2015, ITAR registration, and is partnered with NI, Eclipse Automation, PI, Keysight Technologies and JOT Automation. www.averna.com
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Andrew D. Regrut
Treasurer and Investor Relations Officer
812.827.4151
Investor.Relations@kimballelectronics.com
Source: Kimball Electronics, Inc.
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