Koch Industries Inc. has agreed to buy electronics components
firm Molex Inc. (MOLX, MOLXA) for $7.2 billion in cash, a move that
expands the industrial conglomerate's footprint.
Molex makes electronic, electrical and fiber optic
interconnection systems and serves the mobile devices, infotech,
consumer electronics and automotive markets, among others. Molex
reported sales for the fiscal year ended June 30 of $3.6
billion.
Koch Industries, run by the billionaire brothers Charles and
David Koch, will pay Molex's shareholders a per-share price of
$38.50, representing a roughly 42% average premium to Friday's
close.
Koch Chief Executive Charles Koch characterized the deal as "an
exciting acquisition that matches up well with our culture and our
core capabilities," while also noting it provides a significant new
platform for growth.
Once the deal closes--likely by the end of the year--Molex will
become a standalone unit of Koch Industries and will continue to be
operated by the company's current management team.
The agreement has been approved by both the Molex and the Koch
boards.
"After 75 years this was a difficult decision, but our board of
directors and our family believe that this transaction, which
follows a diligent and thorough review process by the board,
provides outstanding benefits for all our stakeholders," Molex
co-Chairman Fred Krehbiel said.
Koch Industries, a closely held industrial conglomerate with
annual sales of $115 billion, earlier this year acknowledged an
interest in buying newspapers. Koch Industries has also previously
said it also is looking at possible investments in energy and
agriculture-related businesses.
Koch Industries has tended to buy and absorb entire companies,
including the paper towel, tissue and packaging giant
Georgia-Pacific in 2005 and the Stainmaster carpet-fiber business
in 2004. But the conglomerate has also been buying minority
stakes.
Earlier this year, Koch agreed to buy $240 million of preferred
stock in American Greetings Corp. (AM), which helped finance the
card company's plan to go private. Late last year, Koch Industries
paid $1.5 billion for a 44% stake in Guardian Industries Corp., the
world's fourth-largest maker of glass. Koch also is preparing to
help finance a new steel mill in Arkansas.
Shares of Molex closed Friday at $29.34 and were halted
premarket. The stock has risen 7.3% in the past 12 months.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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