Knowles to expand its industrial technology
ITASCA -- Knowles Corp., a maker of small speaker and audio solutions for products such as ear buds and hearing aids, said Monday it will accelerate its transformation into an industrial technology company with the purchase of a South Carolina company.
Knowles has entered into a definitive agreement to acquire Cornell Dubilier in an all-cash transaction valued at $250 million, the company said. In parallel, Knowles announced it is evaluating strategic alternatives for its Consumer MEMS Microphones business.
Cornell Dubilier, based in Liberty, South Carolina, is a manufacturer of high-quality film, electrolytic and mica capacitors used in demanding medtech, military, aerospace and industrial electrification applications with an annualized revenue of more than $135 million and over 35,000 customers.
The total cost of the acquisition is $263 million and consists of a $140 million cash payment at closing and an interest-free seller note of $123 million, with $50 million maturing one year from closing and the remaining $73 million maturing two years from closing, Knowles said.
"Adding Cornell Dubilier's impressive, broad-based roster of (original equipment parts) and distribution partner customers, as well as its leading capabilities in capacitor technology will expand the applications for Knowles' products," said Knowles Chief Executive Officer Jeffrey Niew. "We will be well positioned to grow with new and existing customers as we work to generate stronger earnings and cash flow and create shareholder value.
Knowles' CMM business designs and manufactures micro-electro-mechanical systems microphones that enable voice control communication and superior audio recording for customers across the ear, computer, internet and smartphone market segments.
"The CMM segment is an attractive, cash-producing business with differentiated products and a strong customer base," Niew said. "This process is another step in Knowles' business transformation as we explore potential partners to accelerate a return to growth for CMM."