Born of acquisitions and once the largest PWB companies in the world, Viasystems Group made a strong step toward the crown by agreeing to merge with Merix Corp.

Born of acquisitions and once the largest PWB companies in the world, Viasystems Group made a strong step toward the crown by agreeing to merge with Merix Corp. The deal will create the largest US-based PWB manufacturer, with annual sales of about $840 million, although in terms of actual domestic production, TTM remains the largest.The transaction is expected to be completed by the end of 2009. Under the terms, each Merix share will be converted into approximately 0.11 newly issued shares of Viasystems, subject to adjustment, which will be publicly traded on Nasdaq. Approximately 98% of holders of Merix $70 million convertible senior subordinated notes due 2013 have agreed to enter into an exchange agreement whereby their notes will be exchanged for approximately 1.4 million newly issued Viasystems shares plus a total cash payment of approximately $35 million. While technically a merger, Viasystems's current shareholders will end up owning 80.5% of the combined company, with existing Merix shareholders owning 12.5% and Merix convertible note holders at approximately 7%.The combined company will have 13,000 employees and manufacturing capacity exceeding 4.3 million sq. ft. in China and 375,000 sq. ft. in North America. At closing, the combined company will have $40 million in cash, credit lines of more than $100 million (including a new $75 million line of credit from Wells Wachovia), and $215 million of outstanding debt (a reduction of approximately $80 million). The cash consideration will be financed by Viasystems' existing cash on hand. The combined annual sales of $840 million would push Viasystems from No. 27 to No. 10 in the NTITop 100 PWB fabricator rankings.