RF Industries acquires Corning 'Gold' fiber optic cabling supplier Cables Unlimited
Cables Unlimited's product line adds high value fiber-optic cabling and connector products to RF's existing interconnect and wiring products.
RF Industries, Ltd. (NASDAQ:RFIL) has reached a definitive agreement to acquire privately owned Cables Unlimited Inc. (CUI) for cash and equity worth approximately $5.6 million. Founded in 1992, CUI manufacturers interconnect cable and wire harnesses for OEM customers in the United States and Canada. Cable products include computer, networking, audio, coaxial, fiber-optic, and specialty applications. CUI had revenue of approximately $6.2 million and non-audited non-GAAP adjusted EBITDA of approximately $645,000 in its most recent 12 months ended December 31, 2010, RF Industries says.
Notably, the company also is a Corning Connections “Gold” supplier of fiber-optic cabling products to carriers and enterprises.
"Cables Unlimited's product line adds high value fiber-optic cabling and connector products to our own interconnect and wiring products. As a Corning Connections 'Gold' supplier, CUI's warranted fiber-optic products will be in high demand from our distributors and customers who are very interested in adding fiber-optic products to their enterprise and carrier network customers,” said Howard Hill, president and CEO of RF Industries.
The $5.6 million purchase price is subject to working capital adjustments at the closing. It is payable half in cash and half in shares of unregistered RF Industries common stock. RF Industries says it anticipates that it will pay approximately $2.8 million in cash and issue approximately 760,000 shares of common stock to the seller at closing.
Hill added, “Cables Unlimited's connector, cable, and wire harness product lines complements, adds geographic diversity and custom OEM accounts to RFI's customer base. Their modern facilities will provide RFI with an East Coast presence, enabling improved services to our largest customers. We believe this acquisition will be accretive to RFI's earnings in the current fiscal year ending October 31, 2011."
The transaction is expected to close on or about June 15, 2011, subject to customary closing conditions.