Hexatronic to acquire Rochester Cable in the United States
Hexatronic press release
October 3, 2022
Gothenburg Sweden – Hexatronic Group AB (publ) (“Hexatronic”) has signed a binding asset purchase agreement to acquire all of the business activities of Rochester Cable (“Rochester Cable”), a leading designer and manufacturer of electro-optic cables for harsh environments in the USA, from TE Connectivity (TE), the world leader in connectors and sensors, for an enterprise value of 55 million dollars.
Rochester Cable
Rochester Cable is a recognized leader in the design and manufacture of electro-optical cables for use in harsh environments. The cables are highly engineered to meet the specific requirements of demanding industries such as oil and gas, sensing, defense, oceanography and subsea applications.
Rochester Cable is today powered by 130 employees in Culpeper, Virginia. At the 40,000 square meter production site, Rochester Cable manufactures shielded electro-optical work cables that provide power and transmit power, control signals and data.
The agreement expands Hexatronic’s offering in fiber optic submarine communications cables to include dynamic work cables that can transmit electrical signals and power in addition to transmitting optical signals. Electro-optical cables can accommodate extreme water depths down to 6,000 meters and connect a variety of sensors, equipment and remotely operated vehicles.
Rochester Cable is a high quality producer. Over the past decade, TE has invested heavily in increasing its capacity, and the production facility offers many opportunities for future growth.
The acquired business includes land and buildings for production sites and office buildings. Product sales are primarily in the United States, but also in the EMEA and APAC regions.
Purchase price and financing
In the interrupted fiscal year, October 2021 through September 2022, Rochester Cable is expected to generate pro forma standalone EBITDA of approximately $8 million, representing a pro forma transaction multiple of approximately 7x EBITDA. The acquisition is immediately earnings accretive, adding approximately SEK 0.18 per Hexatronic share in the first full year after closing.
The $55 million purchase price is to be paid in cash at closing, funded entirely by senior debt. The second quarter pro forma net debt to EBITDA ratio for the Hexatronic Group, including Rochester Cable and previously announced transactions, is expected to be approximately 2.0.
Completion of the transaction is subject to regulatory approvals and is expected no later than March 31, 2023.
CEO Comments
“We are pleased to have reached an agreement with TE Connectivity to acquire the business operations of Rochester Cable. Rochester Cable is uniquely positioned with its application know-how and expertise, which was developed market leader for decades. The very qualified has developed a truly differentiated offer and long-term partnerships with its customers.
Hexatronic has been a supplier of undersea fiber optic communications cables since the 1990s. Combining the expertise, geographic footprint and product portfolio of Rochester Cable in the USA and Hexatronic’s underwater business in Sweden offers exciting opportunities for the future,says Henrik Larsson Lyon, CEO of Hexatronic Group.
About TE Connectivity
TE Connectivity is a global leader in industrial technologies that create a safer, sustainable, productive and connected future. Our wide range of connectivity and sensor solutions, proven in the harshest environments, enable advancements in transportation, industrial applications, medical technology, energy, data communications and the home. With more than 85,000 employees, including more than 8,000 engineers, working alongside customers in approximately 140 countries, TE makes sure EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat and Twitter.
Gothenburg, October 3, 2022
Henrik Larsson Lyon
CEO of Hexatronic Group
For more information please contact:
Henrik Larsson Lyon, CEO Hexatronic Group, +46 706 50 34 00
Pernilla Lindén, CFO Hexatronic Group, +46 708 77 58 32
This is information that Hexatronic Group AB (publ) is required to make public under the EU Market Abuse Regulation. The information was submitted for publication, through the contact person listed above, at 2:30 p.m. CEST on October 3, 2022.
This is a translation of the Swedish version of the press release. In case of doubt, the Swedish wording prevails.
Hexatronic creates sustainable networks all over the world. We work in partnership with customers on four continents – from telecommunications operators to network owners – and offer state-of-the-art, high-quality fiber optic technology for every application imaginable. Hexatronic Group (publ.) was founded in Sweden in 1993 and the group is listed on Nasdaq OMX Stockholm. Our global brands include Viper, Stingray, Raptor, InOne and Wistom®.
