Kitron — M&A Activity 2018

Nov 30, 2018

Kitron to acquire the EMS division of API Technologies Corp.

Kitron to acquire the EMS division of API Technologies Corp.

(2018-11-30) Kitron has entered into an agreement with API Technologies Corp. to

acquire its EMS division in the United States. The acquisition marks a

substantial strengthening of Kitron's position in the US market.

"The transaction will significantly strengthen our position in the US market,

particularly within the defence industry. Important customers have wanted us to

expand our presence in the US, and we think this is a great opportunity to do

so," said Peter Nilsson, CEO of Kitron.

The operations of the EMS division are highly complementary to Kitron's existing

operations and are expected to provide added value to current operations, in

particular in the United States. The division's main focus is on defence,

aerospace, medical/industrial, and communications/consumer, and it is well

aligned with Kitron's overall strategy. The business is located in Windber,

Pennsylvania, close to Kitron's current US facility in Johnstown, Pennsylvania,

with approximately 100 employees operating a total of six production lines and a

facility of approximately 10 000 square meters. Total revenues in 2017 amounted

to approximately USD 30 million.

"We have studied this business carefully over time and see great potential for

integrating the API EMS division with the Kitron group, having EMS as its core

business. It has a very interesting customer base, a promising order book and a

highly skilled staff. We expect the division to generate an operating profit on

a stand-alone basis going forward, and see substantial potential for further

profitability improvements by joining forces with Kitron and increasing

utilization," Mr Nilsson said.

The purchase price is USD 15.9 million in cash, equal to net asset value, which

is financed through existing bank arrangements. Closing is expected to take

place in the first quarter of 2019, subject to necessary governmental approvals.

Kitron expects the transaction to be earnings neutral in 2019 and earnings

enhancing in 2020 and beyond.

Please refer to the attached detailed stock exchange announcement for more

information regarding the transaction.

For further information, please contact:

Peter Nilsson, President and CEO, tel. +47 94 84 08 50

Cathrin Nylander, CFO, tel: +47 900 43 284

E-mail: investorrelations@kitron.com

Kitron is one of Scandinavia's leading electronics manufacturing services

companies for the Energy/Telecoms, Industry, Defence, Medical devices and

Offshore/Marine sectors. The company is located in Norway, Sweden, Lithuania,

Germany, China and the United States. Kitron had revenues of approx. NOK 2.4

billion in 2017 and has about 1,450 employees. www.kitron.com

This information is subject to the disclosure requirements set out in section 5

-12 of the Norwegian Securities Trading Act, and section 3-4 of the Oslo Stock

Exchange continuing obligations for listed companies.