SBS Technologies, Inc. Acquires Majority Interest In or Industrial Computers, Gmbh And Announces Plans To Acquire V·I Computer
Acquisitions Broaden CPU Product Line, Presence In Europe is Substantially Expanded
SBS Technologies, Inc. ("SBS") (NASDAQ: SBSE) today announced that, effective July 1, 1998, it acquired a 50.1% interest in or Industrial Computers, GmbH, ("or") (pronounced as letters O.R.), a leading European designer of CPU boards utilized in a wide range of embedded computer applications. (Visit their World Wide Web site at http://www.or-computers.com.) Based in Augsburg, Germany, or designs, manufactures and markets CPU boards based on Intel computer architecture available in the VME, CompactPCI and PCCompact form factors, as well as VME CPU boards based on the Motorola 680X0 series processors and a series of computer input/output boards. SBS also announced that it has entered into a letter of intent to enter into good faith negotiations to purchase 100% of the outstanding shares of V&8226;I Computer ("V&8226;I") from Themis Computer and the minority shareholders of V&8226;I. Based in Encinitas, California, V&8226;I designs, manufactures and markets CPU boards based on the Motorola PowerPC processor for embedded computer applications that utilize VME and CompactPCI bus standards. or has annual sales of approximately $11 million, with the majority of its revenue derived from Europe-based customers. As part of the acquisition, SBS acquired 50.2% of the shares of ortec Electronic Assembly, GmbH, ("ortec"), a related company which manufactures or's commercial products and electronic products for other customers. SBS also acquired 100% of the shares of or Computers, Inc., based in Fairfax, VA, which is the U.S. marketing and support organization for the or product line. In addition, SBS and the shareholders of both or and ortec entered into exclusive option agreements under which SBS may acquire the remaining shares of both companies on February 28, 1999. The purchase price for the majority interest in the two companies based in Germany and 100% of or Computers, Inc. was DM 17.5 million, approximately $9.7 million, paid in cash and SBS Common Stock at closing. V&8226;I, whose products are typically used in telecommunication, industrial automation, and defense applications has annual sales of approximately $5 million. SBS indicated that it will pay $5 million cash, subject to adjustment, at closing for all of the outstanding shares of V&8226;I, with closing expected to occur in July of this year. "Both or and V&8226;I have excellent products, and should benefit from the SBS sales network, extensive I/O solutions and the customer base which we serve. These acquisitions will enhance our current CPU offerings of Intel-based solutions, while adding Motorola-based solutions. These acquisitions will broaden our CPU product line to the point that SBS will be able to serve almost all customer applications in the embedded computer market. The majority of our customers also need to procure a CPU board when they come to SBS for our computer networking and I/O expertise. We will now be able to satisfy our customers' CPU requirements more completely," said Christopher J. Amenson, Chairman and CEO of SBS Technologies, Inc. "or and V&8226;I employees have demonstrated innovation and leadership in design, as well as strong marketing skills, and will add to the synergies among our other product lines," continued Amenson. "The acquisition of our interest in or brings into SBS a leading CPU developer in Europe and will take our Company forward toward becoming a multi-national enterprise," said Amenson. "In line with our stated strategy to expand our international presence, we also intend to develop or into our European base of operations, providing marketing, production and customer support for our existing product lines through or's German operations. We intend to combine or's U.S. marketing activities with our other SBS operations, and to market and support or's products through our network of salaried sales engineers and our U.S. based operations," stated Amenson. "To maximize the benefit of the combination of these two acquisitions, we will need to increase staffing in our engineering and sales organizations in both the U.S. and Europe. We plan to utilize the earnings derived from these acquisitions to make the necessary enhancements within our infrastructure, and, therefore, do not expect these acquisitions to increase our Fiscal 1999 earnings. We expect the acquisition and integration of or and V&8230;I will, however, strategically improve our ability to serve more of our customers' needs and be contributors to our financial performance in Fiscal 2000 and beyond," Amenson continued. SBS Technologies, Inc. is a leading designer and manufacturer of open-architecture, standard bus embedded computer components that system designers can easily use to create a custom solution specific to the user's unique application. SBS product lines include CPU boards, input/output (I/O) modules, avionics interface modules and analyzers, interconnection and expansion units, telemetry boards, data acquisition software and industrial computers. SBS embedded computer components are used in a variety of applications, such as telecommunications, medical imaging, industrial control, and flight instrumentation in commercial and aerospace markets. For news releases, product and other information, visit SBS on the World Wide Web at http://www.sbs.com. Certain of the foregoing information are forward-looking statements regarding the future events or the future financial performance of SBS, and are subject to a number of risks and other factors which could cause the actual results to differ materially from those contained in the forward-looking statements. Among such factors are: general business and economic conditions; customer acceptance of and demand for SBS's new products; SBS's overall ability to design, test and introduce new products on a timely basis; the cyclical nature of the markets addressed by SBS's products; and the risk factors listed from time to time in documents filed by SBS with the Securities and Exchange Commission.