Jun 2 2008
Optical Cable Corporation announced today that it has acquired Superior Modular Products Incorporated (doing business as SMP Data Communications), a leading supplier of fiber optic and copper connectivity products for the data communications industry. The transaction was consummated on May 30, 2008, and now SMP Data Communications is a wholly owned subsidiary of Optical Cable Corporation.
Optical Cable Corporation acquired SMP Data Communications from Preformed Line Products Company (Nasdaq: PLPC) for a purchase price of $11.5 million, subject to certain minimum working capital requirements and related purchase price adjustments. The transaction was effected by an Agreement and Plan of Merger, dated May 30, 2008, whereby SMP Data Communications merged with a newly formed wholly owned subsidiary of Optical Cable Corporation.
"Our long-term strategy for Optical Cable includes expanding our product offerings to provide our customers with more complete cabling and connectivity solutions. This acquisition builds on Optical Cable's strong presence in the enterprise market and is a major step toward fulfilling our long-term vision for Optical Cable," stated Neil Wilkin, President and CEO of Optical Cable Corporation.
SMP Data Communications will broaden Optical Cable's product offering to include a fiber optic and copper connectivity. SMP Data Communications manufactures more than 2,000 products including high performing enhanced Category 5e systems, high-density fiber optic enclosures, and cutting edge Category 6a connectivity solutions offering 10 Gig throughput.
"SMP Data Communications is an internationally respected and industry-leading innovator in copper and fiber optic connectivity products. Optical Cable now has the fiber optic and copper connectivity products necessary for us to offer an integrated suite of high quality cabling and connectivity solutions," stated Mr. Wilkin.
Founded in 1990, SMP Data Communications is located near Asheville, North Carolina, and employs a total of approximately 120 persons, including manufacturing and office personnel. SMP Data Communications net sales (unaudited) were approximately $21.0 million for calendar year 2007.
Financing
On May 30, 2008, Optical Cable Corporation established $17.0 million in credit facilities with Valley Bank of Roanoke, Virginia in connection with the acquisition of SMP Data Communications. Approximately $8.7 million in bank debt financing was used in connection with the transaction, with the remaining purchase price and expenses funded with available cash. After the acquisition, Optical Cable has additional unused and available bank financing of approximately $8.3 million.
"Our new bank credit facilities increased our borrowing capacity to $17.0 million, up from our previous $13.5 million in credit from Valley Bank," stated Tracy Smith, Chief Financial Officer of Optical Cable Corporation. "Our strong, debt-free balance sheet has enabled us to fund prior capital expenditures and investments from operating cash flow. This made it possible to finance the acquisition of SMP Data Communications with bank financing, while maintaining appropriate financial flexibility for Optical Cable," Ms. Smith added.
Leadership
Bill Reynolds, previously the general manager of SMP Data Communications, will continue in his leadership role, serving as President of SMP Data Communications. Mr. Reynolds will also serve as a Senior Vice President of Optical Cable Corporation with responsibilities for sales in the U.S. for both Optical Cable Corporation and SMP Data Communications products.
Mr. Wilkin will serve as Chairman and CEO of SMP Data Communications, in addition to his existing position as Chairman, President and CEO of Optical Cable Corporation.
Ms. Smith will serve as Chief Financial Officer of SMP Data Communications, in addition to her existing position as Chief Financial Officer of Optical Cable.
Michael Newman, Vice President of International Sales for Optical Cable Corporation, will now have responsibilities for sales outside of the U.S. for both Optical Cable Corporation and SMP Data Communications products.
Mr. Reynolds' and Mr. Newman's teams, which will include both SMP Data Communications and Optical Cable Corporation sales and marketing professionals, will also share certain other marketing and sales operations responsibilities.
"We look forward to welcoming the talented men and women of SMP Data Communications, including its experienced management team, to the Optical Cable team," stated Mr. Wilkin.