KEMET Acquires NEC TOKIN to Bolster Component Business

24 February 2017

KEMET Corporation has agreed to acquire NEC TOKIN Corporation, which will strengthen the company’s passive material and component offerings. Upon closing of the transaction in April, NEC TOKIN will change its name to TOKIN Corporation and become a wholly-owned subsidiary of KEMET.

To facilitate the acquisition, NEC TOKIN has entered into an agreement to sell its EMD division (Electromechanical Devices) to NTJ Holdings 1 Ltd., a special purpose entity that is owned by funds managed or operated by Japan Industrial Partners, Inc. for $422 million. The proceeds of this transaction will be used in part to repay the NEC intercompany debt.

Under the terms of the definitive stock purchase agreement, KEMET will pay NEC approximately $52.5 million, plus one-half of the remaining amount, which is determined to be the excess amount of net cash proceeds from the sale of the EMD business. 

“We believe that this combination of our technologies and products will position us to return exponential value to our shareholders over the coming fiscal years,” stated Per Loof, KEMET’s chief executive, in a statement.  “In addition, our improved balance sheet position, combined EBITDA and leverage statistics should enable us to refinance our existing debt at improved interest rates, resulting in less cash interest expense and providing additional earnings per share for our shareholders.”

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