Waytronx Acquires CUI, Inc. For $37.5 Million
Waytronx, Inc. announced that it has acquired CUI, Inc., a provider of electronic components including power supplies, transformers, converters, connectors and industrial controls for Original Equipment Manufacturers (OEMs).
Effective immediately, CUI will become a wholly owned subsidiary of Waytronx. Matthew McKenzie will continue as the president of CUI and assume the role of CEO of parent company Waytronx. William Clough will remain as President and CEO of Waytronx, and assume the role of CEO of CUI. The company does not expect any organizational changes to CUI’s operations in the U.S., China or Sweden.
The acquisition is said to offer significant synergies for revenue growth. It is claimed that CUI’s expertise in power technology, combined with the thermal dissipation architecture from Waytronx, will offer design engineers a comprehensive solution set for the next generation of high power application that must operate at higher temperatures. Also, it is said that CUI’s manufacturing relationships and R&D infrastructure will accelerate the commercialization of the Waytronx architecture, incorporating a variety of patent pending designs to address intense heat in electronic systems. Cost synergies include leveraging existing sales and distribution infrastructure for cross-selling opportunities.
With CUI’s capabilities and extensive contacts throughout Asia, it is said that this acquisition will allow Waytronx to continue to develop its proprietary thermal management technology, including both WayCool™ and WayFast™ technologies. In addition, Waytronx will be working to rapidly bring its product line to market using CUI’s market partners and global distribution capabilities. Moreover, it is stated that CUI’s testing and R&D capabilities will allow Waytronx to commercialize and prototype its products more efficiently and economically.
"This transaction effectively positions Waytronx for accelerated growth," Clough said. "CUI’s talent base of technical employees and their world-class sales and distribution network will enable Waytronx to support its portfolio of innovative technology solutions and services. CUI’s financial infrastructure, its global sales and distribution network, and its dynamic proprietary Web site will allow us to speed market adoption of our revolutionary WayCool architecture to address microwarming in advanced electronics."
The acquisition was secured with a combination of cash, equity, and a $14.0 million note held by the current owner. The initial down payment of $6.0 million was funded in partnership with The Commerce Bank of Oregon, which provided the funding in the form of an interest only three-year instrument at a rate below prime interest.
CUI offers six distinct product lines: interconnect solutions including connectors and cables; sound solutions including speakers and buzzers; control solutions including encoders and sensors; external power solutions; and a specialized brand of internal power solutions known as V-Infinity. These offerings, combined with the Waytronx portfolio of cooling solutions, are said to provide a technology architecture that addresses cooling and power to industries ranging from consumer electronics to defense and alternative energy.
"This is a significant company milestone," McKenzie said. "We now have access to new sources of capital to expand our programs and services for our existing customer base, as well as pursue growth opportunities. As part of a listed entity, we can also expect enhanced visibility in the market and heightened awareness for our company offerings. Further, the addition of the Waytronx intellectual property portfolio to our current product line will increase our ability to penetrate new markets and thereby grow our core business."