Chinese cable maker Shenzhen Woer buys Asian assets from Belden
02 Mar 2013
Shenzhen Woer Heat-Shrinkable Material Co. Ltd., which makes a range of plastic wire and cable products and claims to be the largest maker of such heat-shrinkable materials in China, is paying US$43.3 million (269.7 million Chinese yuan) to buy the Asian consumer electronics assets of American cable maker Belden Inc.
The acquisition of Belden's Hong Kong-based LTK International subsidiary will give Shenzhen Woer substantial additional manufacturing capacity in China. It is also designed, company officials said, to expand its presence in the electronics industry and speed development of environmentally oriented cross-linked materials.
Woer, which was founded in 1998 and is based in Shenzhen, makes cross-linked polyethylene wires, heat shrinkable tubing and materials, polytetrafluoroethylene tubing and EPDM elastomer tubing, among 2,500 products.
The company is publicly-traded on the Shenzhen Stock Exchange and says it specializes in the manufacture and R&D of cross-linked materials.
"Through this acquisition, Woer aims not only to develop its electronics business but also give LTK the ability to share and capitalize on the resources of both Woer and LTK," LTK said in a January letter to customers. "This strategic alliance will allow both parties to stay ahead of their competitors and offer new attention-getting and leading products in electronic cable as well as environmentally-friendly cross-linked materials."
Belden, based in St. Louis and traded on the New York Stock Exchange, bought LTK in 2007 for $195 million (1.42 billion yuan). At the time, Belden said LTK had 2006 annual sales of about $220 million (1.71 billion yuan).
Belden said the Woer deal involved only a part of the original LTK purchase in 2007, but it said the sale would reduce Belden revenues by US$120 million (747 million yuan) in 2013. It said the assets sold were break-even on an operating basis.
"The marketplace was not aligned with our strategic objectives of growth and profit profile, and therefore we felt it better to place it in other's hands," the company said in a statement. "We did take a loss on the sale of these assets."
LTK has four manufacturing plants in China and makes products such as PVC and TPE jacketed cables for data, transmission and automotive applications. It has subsidiaries in Chongqing, Dalian and Huizhou, and more than 2,000 employees, according to its website.
The companies announced the sale in September and completed it Dec. 31. Belden was advised on the deal by the investment bank Houlihan Lokey.
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