Firan Technology Group Corporation
announced that it has acquired substantially all of the assets from
Filtran Microcircuits Inc. (“Filtran”), a Canadian printed circuit board
manufacturer based in Ottawa, Ontario and focused primarily on the manufacture
of microwave printed circuit boards for high frequency applications. Filtran
had annual revenues of approximately $4,000,000 in 2007.
The transaction was effected pursuant to an asset purchase agreement
entered into between FTG, Filtran and Filtran’s parent company, Merrimac
Industries Inc. (“Merrimac”) (AMEX: MRM). The total consideration payable by
FTG is $1.45 million plus the assumption of liabilities valued at
approximately $360,000. FTG paid $800,000 of the purchase price at closing
with the balance payable near the conclusion of an eight-week transitional
period. FTG is financing the acquisition from existing cash and its bank
operating line.
The purchase of Filtran’s assets has significant strategic benefit to FTG
as it is expected that the acquisition will accelerate its penetration of very
high frequency circuit board applications. This market segment’s use of high
technology materials and special processing requirements limit competition and
is a growing segment including many aerospace and defense applications. Under
the terms of the acquisition, FTG has acquired advanced and unique processing
equipment, process know-how, all of Filtran’s customer contracts as well as
the working capital of Filtran. Also as part of the acquisition, FTG has
entered into a separate agreement with Merrimac, to provide printed circuit
boards for Merrimac’s internal needs including a specific military program.
“We are excited about this deal as it enables FTG to continue its
strategy of consolidating printed circuit board manufacturers into a larger,
more capable company that can compete on a world scale”, commented Brad
Bourne, President and Chief Executive Officer of FTG. He added, “Canadian
manufacturers, including FTG, have been hard hit by the continued
year-over-year appreciation of the Canadian dollar and strong commodity
prices. Building larger scale, particularly in specialized technologies, is a
critical strategy in attempting to overcome these external factors.”
“For FTG, after a short transitional period, this transaction is expected
to boost activity in both our Toronto and Chatsworth facilities and should
generate positive contribution margin for both sites”, added Mr. Joe Ricci,
Chief Financial Officer.
