Three-Five Systems Acquires Malaysian EMS Company

TEMPE, Ariz., April 28 -- Three-Five Systems Inc., a provider of electronic manufacturing services (EMS) and display products, announced today it has acquired the business and certain assets of Unico Technology Bhd., a private Malaysian company located in Penang. Unico is an electronics manufacturer for OEM customers in the computer, server and communications industries. The Unico business was acquired by TFS Electronic Manufacturing Services Sdn. Bhd. (TFS-Malaysia), a joint venture established by Three-Five Systems and the former parent company of Unico Technology to facilitate the acquisition.
As a result of the transaction, TFS-Malaysia has the manufacturing capabilities of six surface-mount manufacturing lines with full box-build capability, including lines dedicated to new product introduction and prototyping activity. TFS-Malaysia also offers engineering support, including RF design, automated printed circuit board assembly, in-circuit and functional testing, systems integration and box-build, supply chain management and turnkey packaging and fulfillment services. Existing key customers include Avocent, a leading producer of keyboard, video, mouse switches; WatchGuard Technologies, a developer of authentication and data encryption software and firewall hardware for virtual private networks; and Teledex, a developer of communications equipment.

TFS-Malaysia is owned 60 percent by an overseas TFS subsidiary and 40 percent by Unico Holdings Bhd., the former parent of Unico. Unico Holdings is the investment arm of the Chinese Chamber of Commerce of Malaysia. The financial statements of TFS-Malaysia will be fully consolidated with those of TFS. TFS said it expects the acquisition to be accretive and cash-flow positive and to contribute $15 million to $20 million of additional revenue to TFS for the rest of 2003.

TFS's share of the initial cost of capitalizing TFS-Malaysia was under $5 million, most of which will be used for working capital. No advance payment was required for the acquisition of the property, plant and equipment of Unico, all of which will be leased from the seller.

For more information, visit: www.threefive.com