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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 15, 1998
CTS CORPORATION
Exact name of registrant as specified in its charter)
Indiana 1-4639 35-0225010
(State of other juris- (Commission File (I.R.S. Employer
diction of incorporation) Number) Identification No.)
905 West Boulevard North, Elkhart, Indiana 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 293-7511
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Item 5. Other Events
The information regarding an announcement on September 15, 1998
contained in the press release, filed as Exhibit A to this report, is
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CTS CORPORATION
Dated: September 16, 1998 /S/ Jeannine M. Davis
Jeannine M. Davis
Vice President, Secretary and
General Counsel
Media Contacts:
CTS Corporation
Gary Hoipkemier (219) 293-7511 (Elkhart, IN)
Motorola
Anne Stuessy (847) 480-6848 (Chicago, IL)
Shelagh Lester-Smith (852) 2966-4645 (Hong Kong)
CTS to Acquire Component Business from Motorola's Automotive,
Component, Computer and Energy Sector
(SCHAUMBURG, IL 15 September 1998 ) - Motorola, Inc. (NYSE: MOT)
and CTS Corporation (NYSE: CTS) today announced an agreement by which
CTS will acquire the Component Products Division (CPD) of Motorola's
Automotive, Component, Computer and Energy Sector (ACCES). The two
companies said they have signed a memorandum of understanding and that
the transaction is scheduled to be completed by year-end. The
businesses included in the transaction are Motorola's Ceramics, Quartz,
Oscillator, Piezoelectric Technology and Surface Acoustic Wave
operations.
While the final terms of the transaction have not been set, the
memorandum of understanding contemplates that CTS will acquire CPD for
approximately 1.2 times estimated annual sales. A significant portion
of the purchase price would be in the form of deferred payments which
are contingent on CPD's future operating results. A CTS spokesperson
said that CTS expects to finance a substantial portion of the purchase
price through bank borrowings or the issuance of debt securities. The
transaction is subject to the execution of definitive documentation,
receipt of the appropriate corporate approvals and other conditions.
Accordingly, there can be no assurance that the transaction will be
completed or, if completed, the timing thereof.
Motorola ACCES' Component Products Division has been undergoing a
restructuring, which includes the recently announced closing of Costa
Rica operations, that will continue into 1999 under CTS's ownership.
The restructured business is expected to have sales in excess of $200
million, including sales to Motorola.
According to Marios Zenios, vice president and general manager of
Motorola's Component Products Group, the decision to sell Motorola
ACCES' component business stems from Motorola's initiative to
consolidate operations and focus efforts on core businesses to improve
the value Motorola provides shareholders.
"This is an important strategic transaction for CTS, which will
establish us as a major participant in the fast growing high volume
wireless communication equipment market," said Joseph P. Walker, CTS
chairman and chief executive officer. "The purchase of CPD will provide
CTS with new technologically advanced products as well as an outstanding
organization. We expect to be able to achieve very substantial
synergistic benefits through the integration of CPD and CTS and, equally
important, through the strategic supply relationship between Motorola
and CTS that will result from the transaction," Walker said.
The memorandum of understanding contemplates that Motorola ACCES'
Component Products Division will become a wholly-owned subsidiary of CTS
and will continue to operate under much the same management team as
before, led by Jeff Boehler, currently vice president and general
manager, Motorola Component Products Division. It is expected that
employees of CPD at the time of the closing will be offered employment
with CTS.
"CTS is a premier electronic component supplier and we believe our
two businesses will make an excellent fit," said Boehler. "Motorola
recognizes that strategic supply relationships such as the one being
developed with CTS are critical in moving forward with its strategic
focus. We believe the combined organization will be particularly well
aligned to serve its customers." Motorola is expected to remain a
significant customer of CPD under CTS ownership.
CTS Corporation designs, manufactures and sells a broad line of
electronic components and custom assemblies for OEM customers in
primarily the automotive, computer equipment and communications
equipment markets worldwide. Headquartered in Elkhart, Indiana, USA,
CTS operates 18 manufacturing facilities in the United States, Canada,
Mexico, Scotland, Singapore, Taiwan and China. The Company employs more
than 4,800 persons worldwide. CTS Corporation's 1997 consolidated sales
exceeded $415 million.
Motorola is a global leader in software-driven wireless
communications, semiconductors, and advanced electronic systems and
services. The Component Products Division is part of Motorola's
Automotive, Component, Computer and Energy Sector which delivers
leadership solutions to customers in the form of platform-based embedded
controls and systems. Motorola sales in 1997 were $29.8 billion.
