Black Box sold to Singapore firm
Shares spike after acquisition plan is announced; deal to close by end of the year
Singapore-based AGC Networks Pte. Ltd., a private company founded in 2009, is acquiring struggling Washington County information technology outfit Black Box Corp. for $1.08 per share in cash, subject to regulatory approval.
Shares in Black Box ended Friday at 87 cents, giving the acquisition price a 24 percent premium over the stock closing. The deal is expected to close by the end of the year.
Shares of Black Box closed at $1.07, up 20 cents or more than 22 percent on the day.
The deal will give AGC Networks over $600 million in annual revenue, about 3,000 employees and access to markets in the Americas and Europe. AGC has a strong presence in India, the Middle East and Pacific Rim.
Black Box, which finished its fiscal year ending March 31 with a $100 million loss, raised bankruptcy questions with a “going concern” filing July 2 with the Securities and Exchange Commission. Revenue for the fiscal year fell 9.5 percent to $774.6 million from $855.7 million the previous year, which was down 22 percent since 2015.
A bright spot for Black Box was the award of a $10 million data center contract in July from an unidentified social media company, which was believed to have been Facebook. Black Box said the contract was from the “most wellknown social media company in the world” to equip an “almost million square foot data center.”
Facebook is developing a sprawling, $750 million, 970,000square-foot data center in New Albany, Ohio, and Black Box said the contract may eventually be worth $300 million.
As part of an agreement with lenders, Black Box sold its government division of IT services to private equity firm Arlington Capital Partners in August for $75 million. In the first quarter, Black Box reported flat revenue year over year, $190.8 million in revenue for the quarter compared to $191.6 million a year ago.