Artesyn Receives $50 Million Strategic Investment

January 17, 2002 by Jeff Shepard

Artesyn Technologies Inc. (Boca Raton, FL) announced that it has received a $50.0 million investment from an entity controlled by Bruce Cheng, founder and chairman of Delta Electronics (Taiwan). The $50.0 million investment is being made in Artesyn through a five-year subordinated convertible note. In connection with this investment, Artesyn announced that it has also restructured its existing credit facility.

"For a number of years, Bruce Cheng and I have explored various approaches to forming a strategic alliance that would benefit both organizations," commented Artesyn's President and CEO Joseph O'Donnell. "As a result of our closer ties, we anticipate entering into a number of initiatives that will significantly enhance each company's competitive position, including joint sales and marketing and cross-licensing agreements. In addition, we will explore how to collaborate on advanced research projects and other initiatives. The potential synergies between the two companies are substantial, and we are very excited to have Delta as a strategic partner."

The five-year convertible note carries a three-percent interest rate and a conversion price of $11.00 per share, calculated on a 10-percent premium to the prior 10-day trading average. The agreement also contains certain registration rights and warrants to purchase an additional 1.55 million shares of the company's common stock at a price of $11.50 per share. A portion of the proceeds will be used to reduce outstanding debt, while the remaining funds will be used for general corporate purposes. Both parties have the right to redeem the note after three years.