Yageo’s Board of Direc­tors approved res­o­lu­tion of through Yageo’s 100% owned sub­sidiary Plu­to Merg­er Cor­po­ra­tion to acquire 100% shares of Pulse Elec­tron­ics
20180522

Yageo Cor­po­ra­tion (TAIEX: 2327 TW) today announced to acquire 100% shares of Pulse Elec­tron­ics, an Amer­i­can lead­ing elec­tron­ic com­po­nents part­ner that helps cus­tomers build the next great prod­uct by pro­vid­ing the need­ed tech­ni­cal solu­tions. Through Yageo’s 100% owned sub­sidiary Plu­to Merg­er Cor­po­ra­tion, the total pur­chased amount will be US$ 740 mil­lion, equiv­a­lent to NT$ 22 bil­lion. Both par­ties signed the con­tract today and expect to com­plete this acqui­si­tion soon after fin­ish­ing all prepa­ra­tions and receiv­ing approval from autho­rized gov­ern­ment agency. In 2017, Pulse’s con­sol­i­dat­ed rev­enue was about NT$ 12 bil­lion and oper­at­ing mar­gin was about NT$1.3 bil­lion.

Pulse Elec­tron­ics is a port­fo­lio com­pa­ny of funds man­aged by Oak­tree Cap­i­tal Man­age­ment, L.P. (“Oak­tree”). Oak­tree acquired 100% shares of Pulse Elec­tron­ics in April 2015 through its invest­ment fund, and in the same year, Pulse was delist­ed from the New York Stock Exchange as a pri­vate com­pa­ny. Pulse was estab­lished in 1947 and is head­quar­tered in San Diego, USA. There are 16 R&D and design cen­ters locat­ed in Asia, the Unit­ed States and Europe and 8 sales offices world­wide, and 8 pro­duc­tion plants in Chi­na, the Unit­ed States, the Czech Repub­lic and India with 6,000 employ­ees in total, includ­ing 270 R&D engi­neers and 200 sales­per­sons. Pulse is a glob­al com­pre­hen­sive sup­pli­er of elec­tron­ic com­po­nents. The main prod­ucts are wire­less com­po­nents (Flu­idANT 3D Print­ing anten­na, Laser Direct Struc­tur­ing anten­na, and infra­struc­ture anten­na mod­ules), high-end trans­form­ers, inte­grat­ed con­nec­tor mod­ules, RF Chip induc­tors, pow­er sup­plies and cable sys­tems. Pulse has a long-term devel­op­ment in auto­mo­tive elec­tron­ics and indus­tri­al appli­ca­tions with more than 70 years glob­al brand. Pulse holds a lead­ing posi­tion by its R&D and design-in capa­bil­i­ties in advanced 5G and EV (elec­tric vehi­cle) tech­nol­o­gy with many patents world­wide. Pulse also focused on oth­er appli­ca­tions like net­work­ing equip­ments, wire­less com­mu­ni­ca­tions, and pow­er man­age­ment. End cus­tomers include glob­al brand man­u­fac­tur­ers and dis­trib­u­tors in these seg­ments. Sales area in Chi­na account­ed for 44 %, Europe for 32%, Amer­i­c­as for 15%, the rest of Asia for 9%.

The strat­e­gy of Yageo to acquire Pulse aims to: (1) Prod­uct port­fo­lio expan­sion, not only pro­vid­ing com­plete pas­sive com­po­nents but also offer­ing one-stop shop­ping ser­vice to the cus­tomers in elec­tron­ic com­po­nents such as wire­less com­po­nents, high-end trans­form­ers, inte­grat­ed con­nec­tor
mod­ules, RF chip induc­tors, pow­er sup­plies and cable sys­tems (2) Increase Yageo’s oper­a­tion scale and mar­ket pres­ence in the Unit­ed States and Europe. (3) Con­tin­u­ous­ly to strength­en Yageo’s devel­op­ment in the auto­mo­tive and indus­tri­al mar­kets. (4) Fur­ther expand­ing the busi­ness scale of Pulse’s elec­tron­ic com­po­nents through Yageo’s glob­al mar­ket allo­ca­tions and sales chan­nels. (5) Fur­ther lever­ag­ing the syn­er­gies in tech­nol­o­gy, pro­duc­tion, and man­age­ment between Yageo and Pulse.

Citi served as the exclu­sive finan­cial advi­sor to Yageo for this trans­ac­tion. Through this acqui­si­tion, Yageo expects to con­tin­ue to expand the company’s oper­at­ing scale, obtain more advanced tech­nolo­gies to enhance its inter­na­tion­al com­pet­i­tive­ness, pro­vide faster and more effi­cient ser­vice for glob­al cus­tomers, and cre­ate high­er val­ue for the indus­try and the share­hold­ers.