This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Jabil To Divest Aftermarket Services For $725 Million

Stocks in this article: JBL

Jabil Circuit, Inc. (NYSE: JBL) today announced that it has entered into an agreement with iQor Holdings, Inc. for the sale of its aftermarket services business for $725 million.

In 1999, Jabil entered the electronics warranty repair business through a $30 million acquisition (later named  Jabil Aftermarket Services, or  AMS). “Our AMS business has been a wonderful asset to Jabil over the past 14 years, as it grew through internal growth and acquisitions to represent $1.1 billion in revenue for Jabil in fiscal 2013. Today, Jabil's AMS business is concentrated in depot repair for consumer electronics, which is not aligned with our strategy to focus on diversified manufacturing solutions,” said Mark T. Mondello, Jabil’s C.E.O.

“This divesture should provide us the financial flexibility to potentially add more engineering intensive capabilities, which should allow us to expand and diversify our core manufacturing business. We expect to continue to pursue opportunities similar to our recent Nypro acquisition,” added Mondello.

Jabil has agreed to an exclusive aftermarket service agreement with iQor designed to facilitate continuity of service for existing Jabil customers. “We sincerely appreciate our AMS team and their commitment to customer care and consistency in execution. We are confident that the strategic fit with iQor will make for a smooth transition for our Jabil employees, and the vast majority of our AMS customers will benefit significantly from being a part of iQor,” said Mondello.

Of the $725 million purchase price, $675 million is cash and $50 million is senior nonconvertible preferred stock of iQor that accretes dividends at an annual rate of 8 percent and is redeemable in nine years or upon a change in control. The final purchase price is subject to certain customary adjustments. The transaction is subject to certain closing conditions, including regulatory approvals and receipt of third party consents, and is anticipated to close in Jabil’s third fiscal quarter of 2014.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs