The Anticipated Acquisition Will Create, Based on Historical Revenues, The
World's Second Largest Manufacturer of Flexible Printed Circuits Used in
Electronic Devices
ANAHEIM, Calif., March 30 /PRNewswire-FirstCall/ -- Multi-Fineline
Electronix, Inc. (Nasdaq: MFLX), one of the leading global providers of
high-quality, technologically advanced flexible printed circuit and
value-added component assembly solutions to the electronics industry, with
FY2005 net revenues of U.S. $357 million and net income of U.S. $35 million,
announced today that, subject to the satisfaction or waiver of certain
specified conditions, it intends to make an offer to purchase all of the
issued ordinary shares of MFS Technology Ltd ("MFS") in a voluntary general
offer under Singapore law, which is similar to a tender offer in the U.S. MFS
is a one-stop provider that specializes in design, prototype, production and
assembly of flexible printed circuits complemented by printed circuit boards
with manufacturing facilities in Singapore, Malaysia and China. MFS' ordinary
shares are listed on the Singapore Exchange Securities Trading Limited
(SGX: MFS Tech) with FY 2005 revenues of S$380 million and net profit of S$35
million.
Holders of MFS ordinary shares will be offered the option to receive
either 0.0145 shares of M-Flex common stock for each share of MFS, or cash in
the amount of:
* S$1.15 (U.S. $0.71 based on an exchange rate of U.S $1.00 to S$1.6227,
as reported on Bloomberg on March 28, 2006) per MFS share if less than
90% of MFS shares are tendered, excluding shares held by M-Flex, its
related corporations or their respective nominees; or
* S$1.20 (U.S. $0.74 based on an exchange rate of U.S. $1.00 to S$1.6227,
as reported on Bloomberg on March 28, 2006) per MFS share if at least
90% of the shares held by MFS shareholders are tendered, excluding
shares already held by M-Flex, its related corporations or their
respective nominees.
MFS shareholders may elect to receive either stock consideration or cash
consideration, but not both. MFS shareholders who elect to take the stock
consideration will be required to agree not to sell any of the stock
consideration for a period of six months after the closing of the offer, if it
closes.
The total value of the deal is expected to be approximately U.S. $500
million with the exact amount depending upon the extent of participation and
the number of MFS shareholders electing the cash or stock consideration.
M-Flex expects to finance the offer, which will involve the payment of up to
U.S. $222 million in cash depending upon the level of MFS shareholder
participation and whether MFS shareholders elect cash or stock.
The exchange ratio was determined through an arms' length negotiation
among MFS, M-Flex and WBL Corporation Limited, the common majority stockholder
of both MFS and M-Flex. In reaching the determination, the special
independent committee and board of M-Flex considered, among other factors, the
historical operating results, share price performance and the prospects of MFS
and M-Flex.
According to M-Flex's chairman and chief executive officer, Phil Harding,
the strategic, operational and financial synergies expected to result from
M-Flex's anticipated acquisition of MFS include:
Strategic and Operational Synergies
* M-Flex expects to have the expanded scale to pursue additional product
programs in support of the growing demand for handsets. In terms of
historical revenues, the combined group would become the second largest
company in the world for flex and flex assembly manufacturing.
* M-Flex expects to leverage the available capacity at MFS' established
manufacturing operations.
* M-Flex expects the acquisition will move it toward its stated strategy
of achieving customer diversification.
* M-Flex believes the acquisition will enhance its design capabilities by
allowing it to tap into MFS' Singapore-based design center. MFS' design
center has developed new product platforms, many of which are targeted
to high-growth Asian markets.
* M-Flex expects to enhance its marketing resources and research and
development activities through expanded geographic presence to broaden
the development and accelerate the capture of new customer opportunities
and new product applications.
* M-Flex expects to reduce exposure to risks related to geographic
concentration with added facilities in other countries.
Financial Synergies
* M-Flex expects to realize a reduction in its overall effective tax rate
through expansion of its operations and activities in countries with
lower tax rates.
* M-Flex expects to improve operational efficiencies by streamlining the
manufacturing capabilities of both companies.
* M-Flex expects to decrease manufacturing costs, primarily related to
purchased materials, commonly used by both M-Flex and MFS.
The closing of the offer will be subject to a minimum acceptance level of
64 percent of MFS shares. WBL is a beneficial owner of approximately 56
percent of MFS' outstanding shares and approximately 61 percent of M-Flex's
outstanding shares. WBL has provided MFS and M-Flex with an irrevocable
commitment to support the proposed transaction and to tender its shares in MFS
for the stock consideration, if and when the formal offer is made, subject to
approval of WBL shareholders, if required. In addition, certain directors of
MFS have agreed to tender their shares of MFS to M-Flex in the offer. These
individuals, together with WBL, own at least 57 percent of MFS outstanding
shares. WBL would own beneficially between 59 percent and 68 percent of the
M-Flex common stock (56.1% and 64%, on an effective ownership basis) upon
completion of the acquisition, assuming full acceptance of the offer, and
based upon non-WBL shareholders of MFS accepting either all stock
consideration or all cash consideration in the transaction.
Harding said, "M-Flex has a proven track record with more than 20 years as
a provider of high-quality, technologically advanced flexible printed circuit
and value-added component assembly solutions to the electronics industry. MFS
also has a strong history specializing in the design, manufacture and assembly
of flexible printed circuit products. With a combined presence that spans
China, Japan, Taiwan, Singapore, Malaysia, the Netherlands and the United
States, we believe together we will have a broader geographic reach and one of
the most competitive positions in the marketplace."
The making of the offer is still subject to the satisfaction or waiver of
certain pre-conditions including among other things: (1) the approval of the
U.S. Securities and Exchange Commission of the use of the prospectus/offer
document to be sent to the shareholders of MFS and the proxy statement to be
sent to the stockholders of M-Flex; and (2) the approval, if necessary, of the
shareholders of WBL, with respect to the tender of the shares by WBL in the
offer.
As soon as reasonably practicable M-Flex intends to prepare and file a
Form S-4 Registration Statement with the U.S. Securities and Exchange
Commission that will contain a proxy statement with respect to the special
stockholder meeting to be held by M-Flex and a prospectus/offer document, that
will be sent to MFS shareholders. Once SEC approval is obtained, M-Flex will
announce the offer and thereafter will mail the proxy statement to its
stockholders. Between 14 days and 21 days from the date of the announcement
of the offer, if any, M-Flex will mail the prospectus/offer document to MFS
shareholders. It is expected that the closing of the offer will occur on or
about the date of the special stockholders meeting of M-Flex stockholders,
which will occur within 60 days after the proxy is mailed, assuming all of the
conditions for the closing of the offer have been satisfied or waived. The
prospectus/offer document will contain the terms and conditions of the offer.
Advisors
M-Flex is advised by Needham & Company, LLC and DBS Bank Ltd. for
investment banking and financial advisory services. M-Flex's legal advisors
are Pillsbury Winthrop Shaw Pittman LLP, San Diego, California and Rajah &
Tann, Singapore. MFS is advised by Macquarie Securities (Asia) Pte Limited
for investment banking and financial advisory services. Drew & Napier LLC,
Singapore and Baker & McKenzie LLP, San Francisco, California are legal
advisors to MFS.
Conference Call
M-Flex will host a conference call to discuss the transaction today at
12:00 p.m. Eastern time and 9:00 a.m. Pacific time. The dial-in number for
this call in North America is 800-818-5264 and 913-981-4910 for international
callers. The call also will be webcast live on the Internet and can be
accessed by logging onto http://www.mflex.com. The webcast will be archived on the
company's website for 60 days following the call. An audio replay of the
conference calls will be available for 14 days beginning at 4:00 p.m. Eastern
time (1:00 p.m. Pacific time) on March 30, 2006. The audio replay dial-in
number is 719-457-0820. The replay pass code is 6214357.
About M-Flex
M-Flex (http://www.mflex.com) is a global provider of high-quality,
technologically advanced flexible printed circuit and value-added component
assembly solutions to the electronics industry. The company is one of a
limited number of manufacturers that provides a seamless, integrated
end-to-end flexible printed circuit solution for customers, ranging from
design and application engineering, prototyping and high-volume manufacturing
to turnkey component assembly and testing. The company targets its solutions
within the electronics market and, in particular, focuses on applications
where flexible printed circuits are the enabling technology in achieving a
desired size, shape, weight or functionality of an electronic device. Current
applications for the company's products include mobile phones and smart mobile
devices, personal digital assistants, mobile power adapters, medical devices,
computer/data storage and portable bar code scanners. M-Flex completed its
initial public offering in June 2004, and its common stock is quoted on the
Nasdaq National Market.
Additional Information and Where to Find It
M-Flex plans to file with the U.S. Securities and Exchange Commission
("SEC") a Registration Statement on Form S-4, which will contain a proxy
statement with respect to the special stockholders meeting to be held by
M-Flex and a prospectus/offer document with respect to the offer to be made to
the stockholders of MFS, and other relevant documents concerning the proposed
transaction. Information contained in this document is not a substitute for
the information contained in the proxy statement or the prospectus/offer
document, which will be part of the registration statement on Form S-4.
Stockholders and investors are urged to read the proxy statement and
prospectus/offer document when they become available and any other relevant
documents filed with the SEC because they will contain important information,
including detailed risk factors about M-Flex, MFS and the proposed
transaction. These documents are or will be available free of charge at the
SEC's website (http://www.sec.gov) or by directing a request for such a filing to
M-Flex at 3140 East Coronado Street, Anaheim, California 92806, Attention:
Investor Relations, or by telephone at (714) 573-1121, or by email at
investor_relations@mflex.com, or through M-Flex's website (http://www.mflex.com) as
soon as reasonably practicable after such material is filed with or furnished
to the SEC. This information also will be available on the website of the
Singapore Securities Exchange Trading Limited at http://www.sgx.com.
Participants in Solicitation
M-Flex, MFS and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from M-Flex
stockholders in connection with the proposed transaction. Information about
the directors and executive officers of M-Flex and their ownership of M-Flex
stock is set forth in the proxy statement for M-Flex's 2006 Annual Meeting of
Stockholders. Information about the directors and executive officers of MFS
and their ownership of MFS shares is set forth in the annual report of MFS.
Investors may obtain additional information regarding the interests of such
participants by reading the Form S-4 and proxy statement and prospectus/offer
document with respect to the transaction, when such documents become
available.
Stockholders and investors should carefully read the proxy statement and
the prospectus/offer document, when such documents become available, and
before making any voting or investment decisions.
Responsibility Statement
The directors of M-Flex (including those who may have delegated detailed
supervision of this news release) have taken all reasonable care to ensure
that the facts stated and opinions expressed in this document are fair and
accurate and that no material facts have been omitted from this document, and
they jointly and severally accept responsibility accordingly.
Where any information has been extracted from published or otherwise
publicly available sources or obtained from MFS, the sole responsibility of
the directors of M-Flex has been to ensure through reasonable inquiries that
such information is accurately and correctly extracted from such sources or,
as the case may be, accurately reflected or reproduced in this news release.
Cautionary Information Regarding Forward-Looking Statements
Except for the historical and factual information contained herein, the
matters set forth in this filing, including statements as to expected
synergies the combined companies will realize as a result of the transaction,
and other statements identified by words such as "believes," "estimates,"
"expects," "projects," "plans," and similar expressions, are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
are subject to risks and uncertainties that may cause actual results to differ
materially, including specifically risks associated with the expected
synergies of the proposed transaction, and the other risks and uncertainties
set forth in the reports filed by M-Flex with the SEC, including its most
recently filed Form 10-Q for the quarter ended December 31, 2005. You should
not place undue reliance on these forward-looking statements, which speak only
as of the date of this press release. Unless legally required, M-Flex
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Cautionary Note:
M-Flex has not yet commenced the offer (the "Offer"). The Offer, if made,
will be made only pursuant to a prospectus/offer document and related
materials that the Offeror intends to distribute to shareholders of MFS.
Shareholders of the MFS shares should read carefully the prospectus/offer
document and related materials when they become available because they will
contain important information. Assuming the Offer is made, shareholders of
MFS shares and investors may download a free copy of the M-Flex proxy
statement, the prospectus/offer document and other documents that M-Flex
intends to file with the SEC at the SEC's website at http://www.sec.gov. These
materials contain important information and holders of the MFS shares are
urged to read them carefully prior to making any decision with respect to
their MFS shares or the Offer.
SOURCE Multi-Fineline Electronix, Inc.
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Related links:
http://www.mflex.com
CONTACT:
Connie Chandler, Investor & Media Relations
of Multi-Fineline Electronix, Inc., +1-714-573-1121,
investor_relations@mflex.com
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