Yageo to Acquire Competitor Kemet in $1.8 Billion Deal

Taiwan’s Yageo Corporation is set to acquire its U.S. competitor KEMET Corp in $1.8 billion deal with a goal of expanding its global footprint.

The company claims it offered $27.20 per Kemet share, representing 18% premium to Monday’s closing share price.

“The integration will enhance our ability to serve customers in consumer electronics as well as in the high-end automotive, industrial, aerospace, telecom and medical sectors”, Yageo Chief Executive Officer Pierre Chen said.

Yageo’s global footprint would increase with additional operations in North America, Europe, and Asia, the companies said in a joint statement.

The deal is expected to close in the second half of 2020 and would result in combined annual revenues of about $3 billion, the companies said.

It has been approved by the boards of both companies and is subject to customary closing conditions and regulatory approvals.

Yageo said it intends to fund the transaction with a combination of cash on hand and committed financing.

Established in 1919 and headquartered in Fort Lauderdale, Florida, KEMET is a leading global supplier of high-end electronic components with a global footprint that includes 23 manufacturing facilities and approximately 14,000 employees located in 22 countries in the Americas, Asia and Europe. KEMET’s main products include tantalum capacitors, ceramic capacitors, magnetic, sensors and actuators, and film and electrolytic capacitors. KEMET’s products serve a number of applications, such as advanced automotive electronics, industrial applications, aerospace, medical, as well as smartphones, cloud/networking equipment, wireless communications, alternative energy and 5G technology. Holding more than 1,600 patents and trademarks worldwide, KEMET has established a leading position for its products via its advanced R&D and technical staff and design-in capabilities.

The acquisition of KEMET will:

• Expand Yageo’s product portfolio and enhance Yageo’s ability to serve as a one-stop product solution to customers serving a range of segments and mission-critical applications
• Enhance Yageo’s global footprint with additional operational scale across North America, Europe and Asia with an increased ability to penetrate attractive, high-growth segments and applications
• Drive profitability with meaningful cost synergies and greater efficiencies by leveraging KEMET’s structural transformation that resulted in increased and sustainable margins, as well as an enhanced durability of KEMET’s revenue base
• Enable Yageo to leverage KEMET’s presence and success in Japan through the consolidation synergy of KEMET and TOKIN
• Increase Yageo’s presence providing advanced products to the automotive electronics, 5G networking and communications, robotics and automation and industrial segments, including power supply
• Scale KEMET’s business in Greater China and ASEAN region through Yageo’s regional presence and sales channels.