Hexatronic Group AB says it will continue its recent string of acquisitions with the purchase of KNET Co., Ltd. The Seoul-based company manufactures communications network microducts and will continue to operate as an independent company once the deal closes, a milestone expected this Thursday, December 1. The agreement calls for Hexatronic to pay $48 million in cash for KNET, plus offer up to $15 million in earnouts.
Founded in 2002, KNET has delivered its products to more than 70 countries, with North America, Europe, and Asia its primary markets, in that order. The company operates a manufacturing plant in Jeongeup-si, South Korea, and has offices in the U.S. and Indonesia in addition to its Seoul headquarters. The existing management team, including Founder and Chairman Seo Seong Nam, will continue to run the company post-close.
The earnout Hexatronic will pay will be based on the accumulated EBITDA for the 36-month period post-closing. The seller will receive the full $15 million if KNET achieves an accumulated EBITDA for the 36-month period of more than $63 million. If the accumulated EBITDA for the same period is less than $27 million, no earnout will be paid.
“We are very pleased to have reached an agreement to acquire KNET,” commented Henrik Larsson Lyon, CEO of Hexatronic. “We have been working with the highly skilled team of KNET for more than 10 years and are impressed with the product quality and innovation capabilities. Throughout the years KNET has been an important partner to Hexatronic. Both as a volume supplier managing peaks in demand, but also for products with high technical requirements. The strong support of KNET has been crucial for our strong growth and recent success in North America. Hexatronic is today the largest customer of KNET.”
Shopping spree
The announcement would mark the third acquisition Hexatronic has announced this year. The company also signed deals to buy Rochester Cable and Impact Data Solutions (see "Hexatronic agrees to buy Rochester Cable from TE Connectivity" and “Hexatronic buys Impact Data Solutions from STL”). In the past two years the company also has purchased Data Center Systems, H. Weterings Galgeweg, Qubix, Baltronic Group OÜ and Toronics Inc., and The Light Brigade.
For related articles, visit the Business Topic Center.
For more information on fiber cable and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.