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Knowles to buy Cornell Dubilier, sell off microphone business

Knowles to buy Cornell Dubilier, sell off microphone business

Business news |
By Peter Clarke



Knowles Corp. (Itasca, Illinois) has agreed to acquire privately-held capacitor maker Cornell Dubilier for US$263 million in cash. At the same time the company said it is evaluating strategic alternatives for its consumer MEMS microphones business.

Knowles said it intends to keep its medical microphones, balanced armature speakers and other audio products. The company added the moves are designed to help transform it into an industrial technology company focused on higher value products and higher growth markets. The markets for products that use MEMS microphones – such as smartphones and laptops – have been sluggish in 2022 and 2023.

If completed, the acquisition of Cornell Dubilier would add film, electrolytic and mica capacitor products to Knowles’ portfolio. Cornell Dublilier’s products are used in medtech, military, aerospace, and industrial electrification applications. The company has about 1,000 employees, annual revenue of about US$135 million and over 35,000 customers.

Cornell Dubilier will be absorbed into Knowles’ Precision Devices business unit.

“Adding Cornell Dubilier’s impressive, broad-based roster of OEM and distribution partner customers, as well as its leading capabilities in capacitor technology will expand the applications for Knowles’ products,” said Jeffrey Niew, CEO of Knowles, in a statement.

The total cost of the acquisition is $263 million and consists of a $140 million cash payment at closing and an interest-free seller note of $123 million, with $50 million maturing one year from closing and the remaining $73 million maturing two years from closing.

The acquisition is expected to close in 4Q23, subject to regulatory approvals and other customary closing conditions.

With regard to the consumer MEMS microphone business Niew said: “The CMM segment is an attractive, cash-producing business with differentiated products and a strong customer base. This process is another step in Knowles’ business transformation as we explore potential partners to accelerate a return to growth for CMM.”

Knowles said it has not set a timetable for the conclusion of the strategic review.

Related links and articles:

www.knowles.com

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MEMS microphones drive next-generation voice codec

Infineon is moving the growing microphone market

 

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