Thursday, 6 August 2015

The future's so bright you'll need...

EWAN LAMB on the familiar winners from Viasystems' disappearance

"We are thrilled with where we stand at this point and we are excited about the opportunity in front of us", declared an American electronics executive this week after his debt-ridden company took over the equally debt-ridden empire that was Viasystems.

Those words uttered by Tom Edman, president and chief executive officer of TTM Technologies, during a US conference call on Wednesday could have been lifted from an almost identical declaration 18 years ago when a bunch of Yanks hellbent on making a fast buck took control of highly profitable Forward Group's printed circuit board (PCB) factories in Galashiels and Selkirk.

In 1997 the hardworking Borderers who had turned Exacta Circuits into a global success story were told their futures were so bright they'd need to wear shades. But as we recalled a few days ago, less than a year later the top brass from Viasystems would asset strip the Borders factories and leave more than a thousand skilled workers jobless and extremely angry.

There was no mention this week that TTM's acquisition of Viasystems would mean cuts in the combined workforce of 30,000. But pundits believed redundancies will be necessary if the newly created giant is to achieve its goal and save $55 million dollars a year.

However, it has emerged that several of the influential figures who brought economic misery to sheep and rugby country in the late 1990s have "done good" from the TTM/Viasystems deal. The names Hick, Muse and Sindelar will remain in the memory of many of their Borders 'victims' who were sacrificed in the campaign to gain world domination of PCB manufacturing.

TTM paid $368 million for Viasystems along with another $559 million to cover the company's huge debt mountain. In doing so TTM pushed their own level of indebtedness up by $884 million to an eye-watering $1.1 billion. Viasystems shareholders received $11.33 dollars per share together with 0.706 of a share in TTM.

Hicks Muse & Partners, the investment house which funded the now defunct Viasystems during their Borders rampage - they went on the heap further misery on communities across Europe - held ten million shares (48% of the total) in the resurrected version of Viasystems at the time of the takeover. So their holding was worth $113 million and they were also entitled to seven million shares in TTM.

David Sindelar, directly involved in the industrial carnage in Galashiels ans Selkirk - he was chief financial officer of the St Louis, Missouri outfit and a director of Exacta Circuits in 1997/98 - is now head honcho at Viasystems. According to information filed at the US Securities and Exchange Commission he owned 601,861 Viasystems shares when the deal with TTM was negotiated. So that's another $6.819 million towards his pension pot.

Little wonder there is a pervading smell of positivity oozing out of the new conglomerate which bears the name of TTM. Even the Viasystems website has been amended to become "TTM Technologies. Formerly Viasystems". Perhaps that name will soon be (deservedly) consigned to the dustbin of history.

A distinctly upbeat Mr Edman told the conference call: "The combined company is entering its third month and we are already beginning to see tangible evidence that the capabilities and scale that we now possess are allowing us to add value to our customers with a broader technology profile.

"The integration process is proceeding on track and we are excited about the opportunity in front of us. Our message to employees from day one of the acquisition has been to remain focused on execution on behalf of our customers".

Perhaps the 30,000 fortunate enough to be working for TTM will need those shades after all!

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