The current that flows between South Florida and the rest of the world was strong enough to carry away the headquarters of a pioneering South Carolina technology business early last year.
Now, a $1.8 billion buyout will whisk the company's ownership far from the sun-baked shores of Fort Lauderdale — all the way to China.
Kemet Corp., an electronic components supplier that's celebrating its 100th anniversary, recently announced an agreement to be sold to a Taiwan-based competitor.
The all-cash deal with Yageo Group is expected to be finalized in the second half of 2020, assuming it clears numerous international regulatory and national security hurdles. The combination will create a two-pronged multinational business with about $3 billion in annual sales, 42 factories and 14 research-and-development sites.
In a written statement, Yageo CEO Pierre Chen described the tie-up with Kemet as an "extraordinary opportunity to combine our strengths to achieve synergies in product and technology offerings" while expanding their geographic reach.
"The integration will enhance our ability to serve customers in consumer electronics as well as in the high-end automotive, industrial, aerospace, telecom and medical sectors," he said.
Chen's counterpart at Kemet broke the news in a "town hall script" event addressing his 14,000 employees in 22 countries, including about 500 in South Carolina. CEO Bill Lowe downplayed the impact the sale would have on the rank and file, saying the company's name and senior management will remain in place once the ink is dry.
"This is an exciting step forward in our next phase of growth. ...· We are confident this transaction will position Kemet for long-term growth, benefiting you — our talented employees across the globe — our customers and our business partners," he said.
The deal is the latest milestone for a veteran technology manufacturer that's been part of the Palmetto State's industrial belt for more than half a century.
Kemet grew out of Union Carbide's 1919 acquisition of an Ohio business that had developed an alloy for vacuum tubes. As the market began to shift toward transistors, the company jumped on the capacitor bandwagon in the late 1950s and has ridden it ever since.
Today, the billions of so-called "passive" ceramic- and tantalum-based components that Kemet factories churn out help power all sorts of everyday products that rely on electronic circuitry, from smartphones to cameras to automobiles.
Kemet planted its flag in South Carolina around 1963, when it opened the first of three plants in the state. Union Carbide eventually sold the business, which was headquartered for years in Simpsonville.
After the company went public in 1992, it began trimming back its domestic operations while bulking up overseas. Two factories in Mauldin and Greenwood ended up being mothballed.
While the Greenville County plant and research campus remain, the Kemet corporate suite had left for Fort Lauderdale by early last 2018. In coming to that decision, it determined the Sunshine State location had at least two big advantages over Simpsonville — a pair of international airports and access to a larger multilingual labor pool.
Since then, Kemet was briefly jolted by an unexpected leadership change. Just a few days before Christmas, the company abruptly parted ways with CEO Per-Olof Loof, who was credited with turning the business around during his nearly 14-year run. He agreed to leave without severance after an investigation uncovered a "consensual personal relationship" with an employee and "related actions which were inconsistent with the company’s policies."
Lowe, then the chief financial officer who had planned to retire, stepped into the corner office. The Yadeo deal is by far his biggest strategic move in his brief term as CEO. He said the sale process was initiated after an unidentified suitor came calling unannounced earlier this year.
"We did not actively go out seeking,” he said.
The buyout coincides with a slip in demand for the components Kemet makes. The company reported a 6.3 percent revenue decline last quarter brought on by what Lowe described as a general slowdown in the electronics industry. It also posted a $15.3 million loss tied to the settlement of a price-fixing lawsuit it had been fighting since 2014. Kemet agreed to the $63 million payment without admitting any liability.
If the Yageo sale goes through, the company's days as a publicly traded U.S. business will be over.
Whether investors like the buyout price of $27.20 a share will depend on how long they've had skin in the game. In 2000, Kemet was trading north of $115 a share, according to Google Finance. But anyone who bought the stock since 2006 — it was priced under a buck near the height of the recession in late 2008 — is likely to be satisfied.