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Tyco agrees to buy Praegitzer

MT file photo

The financial fog hanging over Praegitzer Industries is lifting.

The Tualatin-based printed circuit board maker, which has sustained heavy losses throughout this year, will be purchased by conglomerate Tyco International for $72 million cash.

Tyco, based in Bermuda, is expected to add Praegitzer's four manufacturing plants -- including one in White City that employs 392 people -- to its highly successful telecommunications and electronics division.

News of the deal, announced late Tuesday and expected to close by the end of the year, was greeted with excitement and relief by employees at the White City plant, according to Allen Broderick, vice president of business operations.

It would be just excellent for this facility, he said. Tyco is a very solid company. I'm personally very excited.

Broderick said Praegitzer's recent financial struggles -- which not related to the White City plant -- had some employees fearful that the company would be sold off in pieces or that the plant would be shut down.There's been a lot of speculation about the idea of Praegitzer being for sale, a lot of rumors going around, he said.

Tyco officials could not be reached to comment about the White City plant, and Praegitzer officials admit they've been given no assurances about the future of its plants or 1,700 employees, 1,200 of whom work in Oregon.

However, Praegitzer officials said it's likely Tyco will continue to operate the plants since they are Praegitzer's chief assets.

The whole reason why they're buying Praegitzer is for the Dallas, White City and Fremont (Calif.) facilities, Matt Bergeron, president of Praegitzer, told the Associated Press.

It would make logical sense for them to continue to grow those businesses, added Praegitzer spokeswoman Gina O'Neill.

The White City plant has done particularly well in recent months, Broderick said. For the quarter ended Sept. 30, the plant set a record with $11.5 million in revenue, topping the old mark by $300,000. The plant has added more than a dozen employees in recently, regaining most of the 15 jobs trimmed in July as part of a companywide cutback.

Praegitzer was founded in 1981 by timber magnate Robert Praegitzer, who still owns approximately 62 percent of the company. Praegitzer purchased its White City plant from Northwest Printed Circuits in 1990.

In a statement, Tyco chairman and chief executive L. Dennis Kozlowski called Praegitzer an excellent fit with his company's printed circuit group.

Tyco -- a widely diversified company -- is the world's largest manufacturer of electrical and electronic components. For the fiscal year that ended Sept. 30, the company's telecommunications and electronics group made $1.43 billion on sales of $7.92 billion. It has plants in Los Angeles and Logan, Utah, that make printed circuit boards -- a key component in electronic equipment.

Under the terms of the deal, Tyco will buy all 13,129,751 shares of Praegitzer stock for $5.50 a share. The company's stock has traded at $4-$5 a share recently, though it traded as high as $15 in 1997. It closed Wednesday's trading up 92 cents a share to $5.34.

Praegitzer lost $25 million in the fiscal year that ended June 30 and $817,000 more in the quarter that ended Sept. 30 -- thanks largely to plant purchases in Alabama and Malaysia that didn't work out. O'Neill said purchase offers had been coming in regularly for years but the board only voted to give them serious consideration in late September.

A printer works in a yellow-lighted clean room at Praegitzer Industries' White City plant.