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Park Electrochemical to sell unit to Japanese company for $145 million

The sale of the printed circuit materials business marks the Melville company's pivot away from electronics to become "an aerospace only company," the CEO said.

Park Electrochemical's headquarters in Melville.

Park Electrochemical's headquarters in Melville. Photo Credit: Newsday/J. Conrad Williams, Jr.

Park Electrochemical Corp. has agreed to sell its core printed circuit materials business to Tokyo-based AGC Inc. for $145 million in cash, the Melville company announced.

Park shares fell 1.6 percent to close at $22.69 on Thursday, the first trading day after the company's Wednesday night announcement of the deal. The stock was trading at $15.81 a year ago.

The printed circuit business unit has manufacturing facilities in Singapore; Lannemezan, France; Tempe, Arizona, and Anaheim, California, and research facilities in Tempe and Singapore.

AGC, with 2017 sales of about $13.3 billion, supplies flat, automotive and display glass as well as chemicals, ceramics and other materials. AGC formerly was known as Asahi Glass Co.

Park announced that it was considering the sale of its electronics business in January. The deal is expected to close during Park's third fiscal quarter ending Nov. 25.

The printed circuit materials business had sales of $20.7 million in the quarter ended May 27, compared to $10.4 million for aerospace composites.

The company has been working for years to develop the aerospace unit, whose composites are used by jet-engine manufacturer GE, as it faces stiff competition in printed circuit materials, the business on which the company was built.

Park leases its 8,000-square-foot headquarters in Melville. Its aerospace composites facilities are in Singapore and Newton, Kansas.

"When the sale of our electronics business is closed and complete, Park will become an aerospace only company," chairman and chief executive Brian E. Shore said in a statement. "Like our electronics business, our aerospace business was built from nothing. It was started 10 years ago in a farm field in Newton, Kansas." 

Brian Shore's father, Jerry Shore, and Tony Chiesa founded the electronics business when they bought bankrupt New England Laminates Co. based in Stamford, Connecticut, in 1961.

In his statement, Brian Shore said the company developed the first multi-layer circuit board in 1962 to reduce the weight in intercontinental ballistic missiles.

Shore issued a personal note to the employees of the electronics business. "You will probably never understand how much I admire, respect and love you. I will keep you in my thoughts until my last day," he said in the statement. 

Manhattan-based investment bank Greenhill & Co. LLC provided financial advice to Park connected to the transaction, while Detroit-based Honigman Miller Schwartz and Cohn LLP provided legal counsel.

Park is the 22nd largest public company on Long Island based on 2017 revenue. As of Feb. 25, the company had 387 employees, down from about 450 in April 2017.

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