Sparton Corporation – SPA – To acquire Onyx

NYSE: SPA), a premier supplier of sophisticated electromechanical devices, sub-assemblies and related services for highly regulated environments in the Medical, Military & Aerospace, and Industrial markets announces that its wholly owned subsidiary, Sparton Onyx, LLC has signed a definitive agreement to acquire Onyx EMS, LLC in a $43.25 million all-cash transaction, subject to certain post-closing adjustments.

• Acquisition Expected to Provide $50 Million in Annual Revenue
• Adds Expansion into Minneapolis Technology Corridor

Onyx, with sites in both Watertown, South Dakota and Minneapolis, Minnesota, primarily manufactures medical devices for OEM and emerging technology companies, including products for cardiovascular diagnostics, hearing assistance, patient temperature and warming, point-of-care diagnostics, and surgical equipment used in intraosseous medicine. The Company also has a presence in the industrial market providing products such as precision measurement instruments for monitoring air quality and pollution, commercial fire and smoke alarm systems, sensing tools, test fixtures, and complex LED assemblies.

“The addition of Onyx meets the criteria of our growth strategy by providing further expansion regionally into the Minneapolis medical device corridor, diversifying our customer base through both existing programs and a strong business development pipeline, and to continue to increase the number of complex sub-assembly and full device programs within Sparton. Additionally, Onyx brings solid, long-term customer relationships that will utilize Sparton’s expanded list of service offerings such as our low cost country footprint in Viet Nam and full engineering design capabilities,” commented Cary Wood, President & CEO of Sparton Corporation.

“The acquisition is expected to be immediately accretive to earnings and the addition of the Onyx management team and its skilled workforce will further strengthen our business development efforts to support our organic growth initiatives.”

“As Sparton continues to implement its strategic growth plan, we plan to meet our growth expectations by focusing on new business development, internal product research and development, and complementary and compatible acquisitions. We are pleased to have Onyx joining the Sparton family and look forward to the efficient integration of this business as we expect this acquisition to improve profitability and enhance shareholder value,” Mr. Wood concluded.

In support of Sparton, BMO Harris Bank has committed $65 million in credit facilities with an increase option of up to $100 million. The credit facilities will be available for working capital, additional acquisitions and general corporate purposes.

About Sparton Corporation – SPA

Sparton Corporation (SPA), now in its 113th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service, and refurbishment. The primary markets served are Medical, Military & Aerospace, and Industrial & Instrumentation. Headquartered in Schaumburg, IL, SPA currently has five manufacturing locations worldwide.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.