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CTS Set to Acquire Component Business From Motorola

23 December 1998

CTS Set to Acquire Component Business From Motorola's Automotive, Component, Computer and Energy Sector

    SCHAUMBURG, Ill.--23 Dec. 1998--Motorola, Inc. and CTS Corporation today announced that the companies have signed the definitive agreements by which CTS will acquire the Component Products Division (CPD) of Motorola's Automotive, Component, Computer and Energy Sector (ACCES). CPD manufactures ceramics, quartz, oscillator, lead zirconate titanate (PZT) and surface acoustic wave components primarily for telecommunications applications. The transaction, which is subject to financing and other customary closing conditions, is expected to close in the first quarter of 1999.
    Under the terms of the definitive agreements, CTS will pay approximately one times (1X) estimated annual sales for CPD. A significant portion of the purchase price will be in the form of deferred earn-out payments which are contingent on CPD's future operating results.
    According to Marios Zenios, corporate vice president and general manager of Motorola's Component Products Group, the decision to sell CPD was made as a part of Motorola's initiative, announced earlier this year, to improve shareholder value by restructuring its operations and focusing its resources on its core businesses. "CTS is a premier electronic components supplier and we believe our two businesses will make an excellent fit," Zenios said. "Since the signing of our initial agreement in September, we have become even more convinced that the combined team will be very well positioned to develop new technologies and products which will allow them to better serve their customers with a broader portfolio of solutions."
    Joseph P. Walker, CTS' chairman and chief executive officer, said, "Among the highly attractive strategic aspects of the transaction are CPD's extensive product development functions, supported by over 120 highly skilled engineers and scientists, and access the transaction provides to a global marketing organization through CPD's sales and field applications engineering offices around the world. In addition, the unique strategic relationship with Motorola resulting from the transaction will be the cornerstone for repositioning the mix of our business to the rapidly growing wireless communications industry. Equally important, we expect to expand CPD's customer base significantly to others in the communications industry through our combined established relationships."
    CTS will operate CPD as a subsidiary of CTS, named CTS Wireless Components, under its present management team, lead by Jeff Boehler, Vice President and General Manager of CPD. Philip Semprevio, Group Vice President of CTS, will be responsible for overall activities of the newly formed CTS Business Unit.