Germany - Meyer Burger Technology (www.meyerburger.com) announced its decision to discontinue the proprietary wire production for diamond wire at Diamond Materials Tech in Colorado Springs, USA.
Meyer Burger has signed a binding asset purchase agreement with Thermocompact Group now, which will acquire the remaining DMT business for an amount of about USD 6 million in cash. The closing of the transaction is expected by mid-December 2017.
As a result of this transaction, about 25 employees will be transferred to Thermocompact Group. The diamond wire business previously serving PV-related applications has already been closed by Meyer Burger during the first half-year of 2017.
Thermocompact Group (www.thermocompact.com) has dedicated expertise in precious metals coating, high technology wire for EDM applications and fixed abrasive highly technical engineered wires for photovoltaic, electronic and LED industries. The company serves various fields of industries such as automotive, aeronautics, space, connectors, medical and precision cutting.
In 2013, Meyer Burger changed its financial reporting from IFRS to Swiss GAAP FER. In accordance with Swiss GAAP FER 30, Meyer Burger decided to offset goodwill resulting from acquisitions against equity. In case of a divestment of an entity, Swiss GAAP FER accounting standards require the recycling of the associated goodwill through the income statement.
Accordingly, Meyer Burger expects to realize an extraordinary non-cash expense of USD 22.5 million in connection with the goodwill recycling from the divestment of the DMT business. In the income statement, this expense will be included in the Extraordinary result line above Earnings before taxes.
Meyer Burger’s equity will not be affected by the goodwill recycling expense and the goodwill recycling itself does not impact operations.
Hans Brändle, CEO at Meyer Burger: “As we had already announced the discontinuation of our diamond wire business in Colorado Springs in March 2017, we are pleased that we found a good industrial solution for the non-PV oriented business now, with the sale of these activities to Thermocompact. With this divestment, we have completed the discontinuation of our activities in diamond wire production in Colorado Springs and were able to extract some value and cash flow from the residual operations.”