Family makes pounds 50m as PCB buys Forward

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The Independent Online
Forward Group, the maker of printed circuit boards, yesterday agreed to a pounds 129m takeover bid from PCB Investments of the US, a deal that will yield more than pounds 50m for Raymond Chamberlain, chairman, and other family members. The 230p-per-share bid comes just three months after Forward's shares were sent plunging from 263p to 110p after the company issued a profits warning.

Mr Chamberlain owns 6.6 million shares, worth pounds 15m on the bid terms, and his family owns a further 15.3 million. Together with acceptances by other directors, PCB is virtually home and dry with over 40.3 per cent of Forward's equity.

PCB, a company established by private US investment fund - Hicks, Muse, Tate & Furst Equity Fund III - said it intended to use the takeover as a springboard to launch into the European electronics market where it saw "excellent opportunities" for growth, according to Daniel Dross, vice chairman. PCB owns Viasystems, which was poised to compete head-on with Forward.

The offer represents a exit multiple of 23.5 times based on Forward's estimates of pre-tax profits of pounds 8m and earnings of 9.8p per share for the financial year ended January. Forward's shares rose 61p to 225p.

Martin Glanfield, finance director of Forward, said he thought the offer price was "fair" given the current uncertainty surrounding the electronics industry and the market for semiconductors generally.

"There has been some improvement in the market over the past two months, but it's too early to say whether this can be sustained. Furthermore, Viasystems is set to become a big player in Europe and we had to ask ourselves whether we wanted to compete against them or join forces," he said.

Serious talks between the two sides started three weeks ago. Mr Glanfield said the board had extracted a better price from PCB than originally tabled. "We did not start negotiations at 230p... we managed to squeeze more out of them."

Mr Dross said the combination of Forward with Viasystems would create a global force in the manufacture of printed circuit boards. "The merger will allow us to improve our purchasing power with suppliers, while there are unique technologies pertaining to both companies which can be utilised."