Applied Power Agrees to Buy Zero Corp. in $427-Million Deal
Applied Power Inc. on Monday said it agreed to acquire Los Angeles-based Zero Corp., a maker of products used to protect and cool electronic equipment, in a deal valued at $427 million.
The purchase would make Applied Power, a Butler, Wis.-based maker of electrical tools and industrial equipment, the largest supplier of electronic packaging and would boost its packaging sales in the high-growth telecommunication, data processing, semiconductor and computer networking businesses.
“Both Zero and Applied Power had the same vision to be the largest providers of electronic enclosures, “ Zero President and Chief Executive Wilford D. Godbold said. “[The transaction] made all the sense in the world.”
After the acquisition, the company would continue to provide supplies to such telecommunications and technology giants as Motorola Inc., Hewlett-Packard and Nortel, among others.
“This combined entity will be strategically positioned to deliver electronic packaging to a wide variety of end users, from standard to highly customized,” Richard Sim, Applied Power’s chief executive, said in a statement.
The tax-free transaction would give Zero shareholders 0.85 share of Applied Power for each Zero share owned. Based on Applied Power’s closing price Monday of $38.19, the deal is worth $32.46 a share to Zero owners. Zero shares were unchanged at $28.88 on the New York Stock Exchange. Applied Power’s shares fell $1.38. The companies announced the transaction after the market closed.
The acquisition, which needs the approval of both companies’ shareholders, is expected to be completed by July. Applied Power would create a new subsidiary to acquire Zero.
Zero, which has 17 manufacturing facilities and employs more than 2,000 employees, also produces Zero Halliburton aluminum briefcases and luggage, which are sold in more than 2,000 retail outlets worldwide. Godbold said these will continue to be made.
Also on Monday, Applied Power agreed to acquire Irvine-based Product Technology Inc. and Hudson, N.H.-based Premier Industries for $40.3 million in cash and assumed debt. Both firms also produce supplies to the electronics equipment industry. Applied Power would purchase all the assets and assume certain liabilities from Product Technology.
