Yesterday's (9/9) Wall Street Journal proclaimed that Koch Industries (a "conglomerate known for unglamorous industries") is buying Molex. Koch, privately held, is one of Wichita's largest employers and one of the two largest privately held U.S. companies. Cargill is the other.
The current Merger and Acquisition market is pricey, if not frothy. According to the Journal, Koch is paying 38.50 a share or $7.2 billion. Given the scanty numbers in the article, that seems rich: about twice sales, thirty times earnings, and 1.78 times enterprise value.
Nevertheless, Koch only buys companies when it thinks its Market Based Management philosophy can produce positive results. It has found that it has a core competence in managing process business. Still this is an industry with powerful customers including Apple (14% of Molex's revenues) and the automotive industry. They do not roll over for suppliers.
James Haggerty and Bob Tita report in the Wall Street Journal, "Molex, based in Lisle, Ill., makes products including connectors, sockets, antennas and switches used in cars, computers, cellphones and factory equipment, among other things."
MOLEX is traded on the NASDAQ. You can find their SEC filings online.
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