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EFTC Enters Into Letter of Intent to Sell Its Repair Services Business.

DENVER--(BUSINESS WIRE)--July 6, 1999--

EFTC Corporation (Nasdaq:EFTC), an electronic manufacturing services company specializing in high mix services announced today that it has signed a letter of intent with Jabil Circuit, Inc., (NYSE:JBL) to sell its repair/warranty service business. The value of the transaction is expected to be approximately $30 million with additional contingent earn-outs. As part of the transaction, EFTC and Jabil will establish a business relationship whereby EFTC will continue to market to its customers' hub based repair solutions.

EFTC decided to sell this business for several reasons. First, there is an increasing market trend by volume OEMs to seek one-stop repair/warranty and manufacturing solutions from their contract manufacturers. EFTC's repair/warranty business consists of different customers than EFTC's core high mix manufacturing business. Second, EFTC's repair/warranty customers will increasingly be seeking global repair/warranty platforms. Third, EFTC is expecting substantial growth in its core high mix manufacturing business due to its recent transaction with Honeywell and other potential opportunities. Fourth, this sale will strengthen EFTC's balance sheet, which will position EFTC better with its high mix manufacturing customer base.

"In selecting a purchaser, it was important for us to pick someone who we believed we could work with in the future," said Jack Calderon, EFTC's Chief Executive Officer. "EFTC is a pioneer in promoting hub based repair/warranty solutions and we have always believed this model should be expanded to high mix OEMs. With Jabil, we believe we will have an opportunity to pursue this objective through our on-going business relationship."

EFTC's Services operates repair/warranty facilities at major overnight air hubs (Memphis, Tenn. and Louisville, Ky.) and has a bulk repair depot in Tampa, Fla. Approximately 500 people are employed in the business.

EFTC, a provider of high mix electronic manufacturing services, is headquartered at 9351 Grant Street, 6th Floor, Denver, Colorado, 80229, and has facilities located in Arizona, Florida, Kansas, Kentucky, Massachusetts, New Hampshire, Oregon, Tennessee, and Washington State. The Company provides its services to OEM customers in the aerospace/avionics, medical, instrumentation, computer related, and communications industries. EFTC employs approximately 2500 people nationwide.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include the prospects for the consummation of the final agreement, the amount of the final purchase price, EFTC's ability to market opportunities through the alliance, and that EFTC will realize substantial growth in its core high mix manufacturing base business. Factors that could cause actual results to differ materially include the following: business conditions and growth in the Company's industry and in the general economy; competitive factors; risks due to shifts in market demand; and the risk factors listed from time to time in the Company's reports filed with the Securities and Exchange Commission as well as assumptions regarding the foregoing. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.
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Publication:Business Wire
Geographic Code:1USA
Date:Jul 6, 1999
Words:567
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