HARD-bargaining has seen a microchip plant sold for £12.5m just weeks after its owners said it expected to offload it for nothing.
American company RF Micro Devices (RFMD) is set to become the third owner of the former Fujitsu factory in Newton Aycliffe.
Yorkshire company Filtronic, which has owned the plant since 1999, last month said it was in talks to sell it off.
A company statement at the time said: “Filtronic has agreed terms for no initial consideration with the potential for deferred consideration dependent on the achievement of certain targets.”
But yesterday Filtronic said it had sold the factory for £12.5m. A spokesman offered little explanation but to say that “it had managed to negotiate a better price”.
Analysts were caught off the guard by the announcement. Michael Blogg, analyst at Arbuthnot Securities in London, said: “This has come as a bit of a surprise. One possibility is the improvement in the strength of the dollar against the pound.
“Alternatively after looking through the books RFMD have decided that the business is in better shape than originally thought.”
The Newton Aycliffe plant employs around 200 people and it is understood that their jobs are safe for the foreseeable future.
Stewart Watkins, managing director of County Durham Development Company, said: “The Filtronic facility is a flagship project of the region and its sale appears to have secured its future – which is excellent news coming as it does just before Christmas.
“It ends any doubt over the medium term prospects of the plant and will keep jobs in the local area. The plant makes an enormous contribution to the good and growing reputation of this region’s technology sector.”
RFMD, a global player in the design and manufacture of high-performance radio frequency systems and solutions, is a customer of Filtronic and says the purchase will reduce sourcing costs and provide additional capacity.
Bob Bruggeworth, president and chief executive officer of RFMD, said: “The acquisition of Filtronic Compound Semiconductors is expected to increase our manufacturing volume and lower our overall cost structure. It will support our aggressive growth expectations for cellular front ends. In addition, we anticipate that Filtronic Compound Semiconductors’ strong millimeter wave business will add profitable, high-margin revenue to our Multi-Market Products Group and enable RFMD to further diversify into new growth markets that leverage our global leadership in RF.”
Filtronic says the sale is expected to be completed on February 29, next year.
A statement by Filtronic Plc yesterday said that Filtronic Compound Semicondcutors Limited “has assets of £23.5m, with underlying losses of £1.5m and a headline loss including exceptional items of £29m”.
Filtronic Plc will maintain its broadband division – which employs 150 people – at the Newton Aycliffe factory, as well as other operations at its Bradford base.