Three-Five Systems acquires Malaysian EMS company.

Three-Five Systems Inc. (TFS, Tempe, AZ, www.threefive.com), an electronics manufacturing services (EMS) and display products provider, announced recently that it acquired the business and certain assets of Unico Technology Bhd., a privately held Malaysian company located in Penang.

Unico is an electronic manufacturer for original equipment manufacturer (OEM) customers in the computer, server and communications industries. The Unico business was acquired by TFS Electronic Manufacturing Services Sdn. Bhd. (TFS-Malaysia), a joint venture established by Three-Five Systems Inc. and the former parent company of Unico Technology to facilitate the acquisition. As a result of this transaction, TFS-Malaysia now has six surface-mount manufacturing lines with full box-build capability, including lines dedicated to new product introduction and prototyping activity. TFS-Malaysia will also offer engineering support, Including radio frequency (RF) design, automated printed circuit board assembly, in-circuit and functional testing, systems integration and box-build, supply chain management and turnkey packaging and fulfillment services. TFS-Malaysia is owned 60% by an overseas TFS subsidiary and 40% by Unico Holdings Bhd., the former parent of Unico. Unico Holdings is the investment arm of the Chinese Chamber of Commerce of Malaysia. The financial statements of TFS-Malaysia will be fully consolidated with those of TFS.

TFS expects that this acquisition will be accretive, cash flow positive and contribute $15 to $20 million of additional revenue to TFS for the remainder of 2003. TFS' share of the initial cost of capitalizing TFS-Malaysia was under $5 million, most of which will be used for working capital. No advance payment was required for the acquisition of the property, plant and equipment of Unico, all of which will be leased from the seller.