“Charles and David Koch preside over a vast private empire that manufactures a dizzying array of products, from oil pipelines to Brawny paper towels,” Michael J. de la Merced reports for The New York Times. “On Monday, the brothers’ conglomerate made a big move into a very different business by offering to buy Molex, a relatively obscure maker of electronics plugs for the likes of Apple — for $7.2 billion.”
“The deal, the biggest by Koch Industries in eight years, will give the two control of a company whose products reside in computers, X-ray machines and even the iPhone 5,” de la Merced reports. “The transaction trails only Koch Industries’ roughly $22 billion takeover of Georgia-Pacific in 2005. But it may signal that the conglomerate is on the prowl for more opportunities.”
de la Merced reports, “Under the terms of the deal, Koch will pay $38.50 a share. That is a 31 percent premium to the Friday closing price for Molex’s common stock and a 56 percent premium to its Class A shares. A significant portion of those proceeds will go to the Krehbiel family, whose development of a new kind of plastic gave birth to Molex, which generated $3.6 billion in sales and $243.6 million in profit in its most recent fiscal year.”
“Molex was born in 1938, when Frederick A. Krehbiel and his son Edward sought to take advantage of their new invention. Among its initial uses was the manufacturing of flowerpots and clock cases,” de la Merced reports. “Based in Lisle, Ill., Molex had 35,983 employees as of June 30. When its sale closes, expected by year’s end, the business is expected to operate as an independent subsidiary of Koch Industries. Selling the company to private owners could also buy Molex time to improve its operations. The Koch brothers have little need to generate a profit immediately: Forbes magazine estimates that Charles and David Koch are each worth about $34 billion.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dialtone” for the heads up.]