The board of directors of ARC Wireless Solutions, Inc. (NASDAQCM: ARCW) (ARC) has announced the signing of definitive agreements to purchase Advanced Forming Technology, Inc., (AFT) and Quadrant Metals Technologies, LLC (QMT). QMT is a holding company that owns a majority interest in several manufacturing businesses including US MIM producer FloMet LLC.
Through the combination of FloMet and AFT, ARC states that it will create the world leader in Metal Injection Moulding (MIM), describing the technology as “innovative and fast-growing.”
Ted Deinard, Interim Chief Executive Officer of ARC, stated, “While we will continue to be focused on growing our wireless business, we are excited about the opportunity to transform ARC into a larger platform that should enable us to serve our current customers better and to enhance shareholder value.”
“We are grateful to welcome the new additions to ARC’s platform and enthusiastic about creating the world leader in MIM. The combination of FloMet and AFT is a significant milestone in the MIM industry and we are excited about what we can build with the stronger ARC platform in the future.”
Jason Young, Chairman of the ARC Board of Directors added, “After a number of years evaluating potential transactions for ARC, we are pleased that we have now entered into definitive agreements with businesses that will transform ARC into a more robust platform with meaningful cash flow. We look forward to the synergies that a larger organisation will provide to our businesses, their customers, and all of our shareholders.”
Advanced Forming Technology
Advanced Forming Technology, Inc. is an ISO-certified manufacturer of precision metal injection molded parts for the automotive, aerospace, medical, firearms, and consumer markets. AFT operates both out of its 113 acre worldwide headquarters campus in Longmont, Colorado and its 10 acre campus in Retsag, Hungary.
Throughout the past 24 years, it is stated, AFT’s technical expertise has enabled it to establish a strong customer base with multiple multi-national Fortune 500 firms in the automotive, healthcare, ammunition, and aerospace industries.
AFT will divest itself of its Thixoforming division prior to the closing.
FloMet LLC is a leading manufacturer of precision, miniature components via the metal injection molding process. The company is regarded as one of the pioneers and leading innovators in MIM and customised materials technology, with more than 20 years of experience in making quality, miniature production components
ARC, through its operating subsidiaries ARC Wireless LLC and ARC Wireless Ltd. (collectively “ARC Wireless”), focuses on wireless broadband technology. ARC Wireless designs and develops products that extend the reach of broadband and other wireless networks and simplifies the implementation of those networks. ARC Wireless supplies its products to public and private carriers, wireless infrastructure providers, wireless equipment distributors, value added resellers and other original equipment manufacturers.
ARC will maintain its commitment to growing the wireless broadband internet business through products such as its eXsite® dual-polarization dish and variable sector antennas, IES™ line of integrated panel antennas and enclosures, and the new ARCFlex™ line of full solution radios. However, ARC will now have the benefit of a larger manufacturing platform to provide further support to grow its business and continue to streamline costs.
Preliminary proxy materials related to the acquisitions and other corporate matters are available at www.arcwireless.net. The transaction is expected to be completed in the second quarter of 2012 subject to regulatory and shareholder approval.
Highlights of the acquisitions include the following:
- ARC to acquire AFT, including its assets and operations in Hungary, for $43 million, approximately 1.0x Book Value, in a mix of cash and a convertible promissory note.
- ARC to issue 7,857,898 shares valued at $4.00 per share, a 36% premium to ARC’s closing price as of April 12, 2012, to acquire QMT in a non-cash transaction.
- Transaction values equity of QMT at $31.4 million, a significant discount to the low end of a range determined by an independent valuation and advisory services provider.
- Pro-forma projected Net Sales for twelve months ending June 30, 2012: $66 million.
- Historical EBITDA margins at QMT have been approximately 15-19%, which ARC would expect to achieve or improve on company-wide over time, upon integration and growth of its business.
Introduction to Powder Injection Moulding: Process, Materials & Applications
Discover our 14 page Introduction to Powder Injection Moulding section to find out more about the process steps for PIM.
We also look at a range of materials that can be processed, basic properties, and some applications for PIM products.