Koch Industries to acquire Molex for $7.2 bn

Koch Industries, the second-largest private corporation in the US, yesterday agreed to acquire Molex Inc, a maker electronic, electrical and fibre optic interconnection systems, for about $7.2 billion.

Under the deal, Koch will pay $38.50 per share in cash, a 42-per cent premium to the average closing price of the two classes of publicly traded shares of Molex on 6 September.

Based in Illinois, Molex is a 75-year-old global manufacturer of electronic, electrical and fibre optic interconnection systems.

The company operates 41 manufacturing locations in 15 countries and employs more than 35,000 people globally. Molex offers approximately 100,000 products through direct salespeople and authorised distributors.

Molex serves the mobile devices, infotech, consumer electronics, automotive, industrial, medical, telecommunications, military and aerospace industry.

Molex had sales of $3.6 billion for the fiscal year ended 30 June 2013, with over 70 per cent of revenues coming from outside the US.

Based in Kansas, Koch is one of the largest private companies in the US with annual revenues of about $115 billion.

It owns a diverse group of companies involved in refining, chemicals and biofuels; forest and consumer products, fertilizers, polymers and fibres, process and pollution control equipment and technologies, minerals, commodity trading and services, ranching, glass, and investments.

Since 2003, Koch group companies have invested about $50 billion in acquisitions and other capital expenditures.

The deal has been approved by both the Molex and the Koch Industries boards of directors, and certain members of the Krehbiel family and certain executive officers of Molex, owning around 32 per cent of the common Stock and 94 per cent of the Class B common stock, have agreed to vote in favour of the transaction.

Post closing, Molex will become a standalone subsidiary of Koch Industries and will continue to be operated by the company's current management team.

''After 75 years this was a difficult decision, but our board of directors and our family believe that this transaction, which follows a diligent and thorough review process by the board, provides outstanding benefits for all our stakeholders,'' said Fred Krehbiel, co-chairman of the Molex board.

Charles Koch, chairman and CEO of Koch said that Molex is ''an exciting acquisition that matches up well with our culture and our core capabilities. It also provides a significant new platform for growth.