An offer is on the table to sell one of the region's largest private companies and employers later in the fall as Pacific Insight's board of directors and officers have agreed to sell to a multi-national corporation.
On Aug. 1 Pacific Insight Electronics Corp. entered into a definitive agreement with Methode Electronics Inc. to acquire all of the outstanding shares of the Nelson company in an all-cash transaction for $144 million CAD.
The manufacturer of LED-based ambient and direct lighting for vehicles employs approximately 1,100 people in Nelson, Fresnillo, Mexico, Vancouver and Detroit. As the sale is still pending several levels of financial and legal approval, there has been no mention of layoffs in any of the company's locations, nor the fate of the Nelson operation.
But the company is expected to grow and continue on, noted Stuart Ross, Pacific Insight's chief executive officer, in a press release. He said Methode was the ideal partner for Pacific Insight given the complementary nature of the products and expertise both companies possess.
"Importantly, Methode's global manufacturing footprint will provide us the ability to meet our customers' requested expansion into Asia and Europe," he said.
The size of the new company is expected to provide for all stakeholders, including employees, customers, suppliers and local communities that Pacific Insight would not have had on its own, said Ross.
"Pacific Insight is one of the largest employers in Nelson and we look forward to working with the new owners of this vibrant company," said Nelson Mayor Deb Kozak when asked about Pacific Insight decision.
The news of the pending sale surprised Regional District of Central Kootenay chair Karen Hamling, but she was positive the economic benefit of the operation would continue in the RDCK.
"It has grown from a very small business to a huge success and been a boon for this area providing jobs for the people of Nelson and area," she said.
"I wish the best to the current owners and look forward to seeing the company grow and hopefully provide an even greater economic spin off for the Kootenays."
In explaining the rationale for the purchase, Methode's president and CEO Don Duda said because of Pacific Insight's reputation as an expert in lighting, they saw the potential to bring Pacific Insight's technology and expertise to its non-automotive customers as well.
A special meeting of the holders of Pacific Insight securities is expected to take place by no later than end of September. To become effective, the resolution approving the arrangement must be passed by two thirds of the shareholders of Pacific Insight.
Before the voting takes place, the arrangement allows for an "unsolicited superior proposal" that could either be matched by Methode or pre-empt the deal.
The directors and officers of Pacific Insight represent approximately 29.1 per cent of Pacific Insight's shareholders and have agreed to vote in favour of the transaction.
The closing of the arrangement is expected to be completed in the last quarter of calendar 2017. At that time, Pacific Insight will become a wholly-owned subsidiary of Methode and the Pacific Insight Shares will be delisted from the Toronto Stock Exchange.
Founded in Nelson in 1984, Pacific Insight offers design, development, manufacturing and delivery of electronic products and full service solutions to the automotive, commercial vehicle and specialty markets.
It provides OEMs as well as tier one and tier two customers with a range of cost competitive products including LED lighting systems, electronic control modules and wire harnesses.
Methode is a global developer of custom engineered and application specific products and solutions with manufacturing, design and testing facilities in China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, Singapore, Switzerland, the United Kingdom and the United States.
Methode designs, manufactures and markets devices employing electrical, electronic, wireless, safety radio remote control, sensing and optical technologies to control and convey signals through sensors, interconnections and controls.
Methode's components are in the primary end markets of the automobile, computer, information processing and networking equipment, voice and data communication systems, consumer electronics, appliances, aerospace vehicles and industrial equipment industries.