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Flextronics picks up Solectron for $3.6B

Mon, 06/04/2007 - 8:03am
Brian Santo

Flextronics International will buy Solectron for about $3.6 billion. The deal represents a major consolidation in the contract manufacturing market.

Of the two companies, Solectron has more experience with the cable industry. For example, the company used to make several Terayon broadband products, and is also relied upon heavily by Arris for many products in its broadband portfolio.

Other customers include Cisco Systems, Ericsson, Hewlett-Packard, IBM, Lucent Technologies, Motorola, NEC, Nortel Networks and Sun Microsystems.

For these and other companies, Solectron makes core and edge routers, core and edge Ethernet switches, DSLAMs, NICs and optical interconnect, as well as cellular infrastructure equipment, voice-over-Internet Protocol (VoIP) equipment, and IP PBX gear.
 
Citigroup Global Markets is providing Flextronics with the bulk of the financing for the purchase: a $2.5 billion, seven-year senior unsecured term loan. Solectron will be operated as a subsidiary.

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