ICL has off-loaded its contract manufacturing arm Design 2 Distribution (D2D), confirming its days as a major hardware manufacturer are numbered. D2D has been sold to Canadian electronic manufacturing services company, Celestica for around $140 million.
The sale is in keeping with ICL's plans to transform itself into a systems and services company, as outlined by CEO Keith Todd, last year. It also follows the company's move away from the volume PC business, which parent company Fujitsu merged with its own business to form Fujitsu ICL back in July.
D2D currently boasts annual sales of $560 million with a workforce of 2,500 people, and with manufacturing sites in Kitsgrove and Manchester in the UK, D2D will continue trading under its existing name. The company did make a small loss in 1995, while 1996 results are expected to be out in a couple of months. As yet, there are no plans to scale down the operation and it will continue to make printed circuit boards for manufacturers such as Sun Microsystems.
"D2D required constant investment and working capital," said ICL spokesman John Cheetham, "and trying to satisfy customers in the Far East and North America became a constraint on ICL. Now the investment and working capital can be re-directed into computer services."
This acquisition is part of Celestica's ultimate goal to provide our services and products in all three geographies to meet the needs of our customers in their marketplaces," said Eugene Polistuk, President and CEO of Celestica. "Our combined strengths will allow us to create a larger, more diversified
presence in the world of electronic manufacturing services."
"This is excellent news for D2D and Celestica," said Alastair Kelly, Managing Director, D2D. "It gives D2D a formidable partner in North America, where D2D has yet to establish a sizeable presence, and it gives Celestica the ability to service its North American customers in Europe through D2D."