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Lester Electronics Financial Alternative Benchmarking Essay

1031 words - 4 pages

KEG Electronics Group (KEG)The merger of the Kimball Electronics Group (KEG) and Reptron Manufacturing Services (RMS) was benchmarked for its LEI and SwE similarities. KEG originated in 1961 as a manufacture of electronic organs. In the latter part of 1980, KEG exclusively provided electronic manufacturing contract services. KEG designs, engineers, packages and distributes its electronic assemblies and circuit boards. KEGs’ U.S., European, and Asian, operating facilities, equipment, and product offerings have been touted as state-of-the-art. KEGs’ operational goal has been to be globally profitable as its industry’s leading electronics manufacture. Maintaining long-term intimate OEM customer relationships by the provision of superior, diverse technologically advanced value added services and products has given KEG the competitive advantage.To further its industry edge KEG acquired Reptron Manufacturing Services (RMS) in 2007. KEGs’ manufacturing arena expanded its product offerings. The globally recognized KEG serviced the medical, industrial, public safety and automotive industries as the leading durable electronics manufacturer of vastly complex and vital product offerings. KEGs’ corporate core competencies (CCC) included tiger teams for the introduction of new products (NPI), transfer of work (TOW), lean, six sigma and IT integration (KEG, 2006).Reptron Manufacturing Services Inc., (RMS)In January 2007 to further its global footprint KEG acquired the Florida based Reptron Manufacturing Services (RMS). RSM was an EMS provider, servicing the North American medical and industrial electronics industries with complete medical device manufacturing solutions. In 2007, RSM year-end sale revenues were a reported 38.9 million. Renowned and awarded for its innovation and technology RMSs’ product offerings include display integration and engineering services, with complex circuit board assembly, and full electronics manufacturing (Reptron, 2006). KEG was listed as purchasing RSM at 0.68 cents per share; this would have been a 28% premium on RSM's documented 0.53 cents three-month average stock price (yahoofinance, 2008). The stipulations and conditions of this merger stated that KEG fund a cash tender offer for RSMs’ outstanding senior secured notes due 2009 to be successful completed at 12.5 percent discount to par value. Once initiated by RMS on Dec. 22, withstanding KEGs’ waiver this offer was subject to a 97% minimum acceptance. In addition, RMS previous debt would be assumed by KEG (PR newswire, 2006). The acquisition of RSM included four manufacturing facilities located in California, Florida, Michigan, and Minnesota, each facility was granted access to KEGs’ CCCs’. This acquisition increased KEGs’ intellectual capital roster merging more than 1200 RMS engineering, management and frontline employees into KEGs’ fold (Reptron, 2006).American Capacitor Corporation (ACC)The privately held...

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