Benchmark to pay $70M for Lockheed contracting unit

Electronic News, Feb 2, 1998

Bethesda, MD.--Lockheed Martin Corp. here and Benchmark Electronics, Inc. have reached an agreement for Benchmark to acquire the stock of Lockheed Martin Commercial Electronics, a wholly-owned contract manufacturing subsidiary of Lockheed Martin in Hudson, N.H. for $70 million in cash, a portion of which will be funded by bank debt.

Lockheed Martin Commercial Electronics, an operating unit of Lockheed Martin Electronics Sector, is one of New England's largest electronics manufacturing services company, providing printed circuit board assembly and test, system assembly and test, prototyping, depot repair, materials procurement, and engineering support services. Principal customers of Commercial Electronics include leading networking, computer and telecommunications companies, it was said. The business has a workforce of approximately 680 employees.

Benchmark is a full-service supplier of design, engineering and electronics manufacturing services with 1997 revenues of $325 million. The company operates facilities in Angleton, Texas; Beaverton, Oregon; and Winona, Minnesota.

Don Nigbor, president/CEO of Benchmark, said, "This combination presents an exciting opportunity for our customers, suppliers and employees, broadening our geographic presence and increasing our overall range of capabilities in the rapidly consolidating and increasingly competitive contract manufacturing marketplace."

Meanwhile, "This proposed transaction enables Lockheed Martin Electronics to refine its focus on core strengths and capabilities in systems integration, defense electronics and closely adjacent markets," said Thomas A. Corcoran, president/COO of Lockheed Martin Electronics Sector. "At the same time, we believe this move enables Commercial Electronics to become part of a stronger entity in a contract manufacturing industry that is undergoing dramatic change." Under the agreement, Benchmark Electronics will lease the 250,000-square-foot facility that houses Commercial Electronics in Hudson, N.H. "This proposed transaction will enable us to better serve our customers as we become an integral part of a growing business that is fully dedicated to contract manufacturing," said Roger M. Damphousse, President of Lockheed Martin Commercial Electronics. "We are looking forward to joining the Benchmark Electronics team and to combining our skills and expertise with those of Benchmark Electronics to become a new competitive force in the marketplace."

Following the closing, Mr. Damphousse will join the Benchmark management team as president of the Hudson Division of Benchmark Electronics, reporting to Mr. Nigbor. The proposed transaction, which is subject to certain government approvals, is expected to close by mid-February. J.P. Morgan acted as financial advisor to Lockheed Martin on the transaction. Benchmark Electronics was advised by Stephens, Inc.