DeWITT — The CEO of Belden, Inc. (NYSE: BDC) expects the addition of DeWitt–based PPC to bolster his company’s offerings in broadband technology. PPC is a developer and manufacturer of connectors used in telecommunications with a particular strength in broadband applications, according to Belden, which announced its $515.7 million acquisition of privately held PPC on […]
DeWITT — The CEO of Belden, Inc. (NYSE: BDC) expects the addition of DeWitt–based PPC to bolster his company’s offerings in broadband technology.
PPC is a developer and manufacturer of connectors used in telecommunications with a particular strength in broadband applications, according to Belden, which announced its $515.7 million acquisition of privately held PPC on Dec. 11. Belden, based in St. Louis, designs and manufactures connectivity, networking, and cabling technology for the industrial, enterprise, and broadcast markets.
Broadband will be a key growth area for Belden in the coming years, Belden President and CEO John Stroup said during a presentation at the company’s investor day on Dec. 11. Existing broadband infrastructure can’t support the rising demand for higher bandwidth and broadband providers are continually looking to add more services, he noted.
Innovative connectors, like those manufactured by PPC, help providers reduce costs and boost customer satisfaction, Stroup said.
In addition, emerging markets with rising middle classes will be seeking higher bandwidths in the future, he said.
PPC will play a part in addressing all of those growth drivers, he added.
PPC, which employs 774 people in DeWitt, will generate 2012 revenue of about $238 million, according to Belden. It’s too early to say whether any layoffs could result from the acquisition, says Eric Ehlers, a Belden spokesman.
The companies are working on the best way to integrate their operations now, he adds. There are no immediate plans to cut jobs or make other changes at PPC, Ehlers says.
It’s also too soon to say whether Belden will continue to use the PPC name, although it has done so with some other companies it has acquired in the past, Ehlers says.
Belden will fund the PPC acquisition with about $300 million in cash and about $200 million in debt financing, Ehlers says.
Belden has 7,400 employees and manufacturing sites in North America, South America, Europe, and Asia.
Belden leaders expect the PPC deal to add 54 cents a share to their company’s adjusted 2013 earnings. Belden generated revenue of $1.98 billion in 2011, up 23 percent from 2010, and earned $114.3 million, up from $108.5 million.
The company is expecting 2012 revenue of $1.94 billion to $1.95 billion and adjusted income from continuing operations of $3 to $3.05 per share. Belden earned $2.40 per share from continuing operations in 2011.
Belden shares closed up nearly 6.5 percent on the day it announced the acquisition, before the open of trading. The stock hit a new 52-week high.
Belden’s business is split evenly between networking and connectivity and cabling, Ehlers says. The firm’s products end up with television broadcasters, factories, oil and gas businesses, data centers, and more.
No one from PPC could be reached for comment on the acquisition. The family-owned business began life during World War II. John Mezzalingua started the business with a single drilling machine in the basement of his in-laws’ restaurant, according to PPC’s website.
Mezzalingua’s son Dan took over the company after him and his grandson John is the current president. PPC has expanded over the years with a manufacturing plant in Denmark and became the first connector company to establish a presence in India, according to the firm’s website.
PPC now has factories in the Syracuse area and in locations around the world and grew its business tenfold during the 1990s.
PPC isn’t Belden’s first acquisition this year. The company acquired Miranda Technologies, Inc. (TSX: MT) in July. Based in Montreal, Miranda provided hardware and software for the broadcast infrastructure industry.
Contact Tampone at ktampone@cnybj.com