Titan Electronics, a division of The Titan Corporation (NYSE: TTN) located in San Diego, California, is a specialty supplier of VME and Multibus products sold predominantly to prime defense contractors worldwide. These products provide real-time computing capabilities in harsh environments.
SCI Technology, Inc., a, wholly owned subsidiary of SCI Systems, Inc. (NASDAQ), is located in Huntsville , Alabama . SCI Systems, Inc. is a diversified, multibillion dollar electronics company with worldwide operations which sell into the computer, aerospace, defense, telecommunication, medical and entertainment industries.
OEM Capital was engaged to assist Titan in finding a buyer for its Electronics Division, which no longer fit Titan’s new corporate strategy of focusing on information systems and services to commercial and government customers. Working with management, we prepared marketing materials to best reflect the incremental profit contribution that could be realized by a synergistic acquirer. We then initiated a sale process which was timed to coincide with the improving fortunes of the business.
OEM Capital contacted over 100 companies in the US and abroad who we believed could have a serious interest. After developing a competitive bidding environment, the final price realized was substantially above offers Titan Corporation had received immediately prior to our involvement in the sale process. In addition, during the period of our active involvement, Titan Electronics was able to ship almost all its order backlog and receive the full benefit from these revenues.
Our success with Titan Electronics illustrates that, whether a business is healthy or distressed, superior valuations can be realized for the selling shareholders by a well executed approach to a sale or divestiture by merger and acquisition professionals who are knowledgeable about the industry and the intentions of its participants.