AVX looking to buy again

Contact: Brenon Daly

A year and a half after inking the largest deal in its history, electronic components maker AVX is mulling a return to the market. CEO John Gilbertson told investors at the Thomas Weisel Partners Technology Conference on Monday that he’s considering acquisitions that would bolster the company’s specialty business, including defense, medical or aerospace. Gilbertson added that any deal would be small, likely in the range of $30-50m.

The CEO also said he wouldn’t be paying anywhere close to the multiple he paid in AVX’s largest deal, the $231m all-cash purchase of American Technical Ceramics (ATC) in June 2007. In that transaction, AVX paid 2.6x trailing 12-month revenue for ATC, in part because it had to outbid at least three other parties. (Thomas Weisel banked ATC.)

Since announcing that acquisition, shares of AVX – a dividend-paying company that is majority owned by Kyocera – have lost 40% of their value. The company currently has no debt, with $527m in cash and equivalents, and sports an enterprise value of about $1bn. That’s just 0.6x the $1.6bn in sales that AVX recorded in 2008. Gilbertson said that’s more the valuation he’d expect to pay in any deal he’d do these days.