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Phitek sold in $60m deal

NZ Newswire logoNZ Newswire 26/01/2017 Paul McBeth

Kiwi noise-cancelling technology company Phitek Systems has been sold to New York-listed Amphenol Corp for $60 million..

Connecticut-based Amphenol announced the deal in a statement to the New York Stock Exchange when reporting its fourth-quarter earnings, saying the Phitek purchase was part of a broader acquisition programme, without disclosing a price.

However, local filings to the Companies Office show Amphenol agreed to pay $60m plus net cash, minus the New Zealand company's indebtedness, the levels of which have not been disclosed.

"Phitek, based in New Zealand, designs and supplies aircraft in-flight entertainment interconnect products for the commercial aerospace industry, and generates annual sales of approximately $US20 million," Amphenol chief executive R. Adam Norwitt said in a statement. "This acquisition strengthens the company's global capabilities and enhances our product offering in this important end market."

Auckland-based Phitek, reported a profit of $3.9m in the 12 months ended March 31, up from a profit of $1.6m a year earlier, with revenue up 32 per cent to $22.6m.

The New Zealand firm's subsidies from Callaghan Innovation were taken into account by Amphenol, with $2.4m of the purchase price set aside.

The New Zealand government agency introduced clawback provisions on its research and development grants after local firm Endace was sold to overseas buyers without having to repay $11.1m of the taxpayer funding it received.

Phitek's vendors will also have $4.3m held in escrow to satisfy any warranty claims.

The US company will keep Phitek's New Zealand operations on a 'business as usual' basis and adopt the Phitek brand and logo.

Phitek's shareholders include Direct Capital-managed TMT Ventures, which has been invested in the audio company since 2005, with a direct 27 per cent and a 14 per cent holding shared with the New Zealand Venture Investment Fund, while Stephen Tindal's K1W1 investment vehicle owns 39 per cent.nz

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