Note 14 Strategic Transactions

9 Months Ended

Jul. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Business Combination Disclosure

Strategic Transactions

India Joint Venture

On March 2, 2022, the Company entered into a Share Subscription and Purchase Agreement (the “SSPA”) and a Joint Venture and Shareholders’ Agreement (the “Shareholders’ Agreement”) with Reliance Strategic Business Ventures Limited (“RSVL”), a wholly owned subsidiary of Reliance Industries Limited. Pursuant to the SSPA and the Shareholder’ Agreement, the parties will establish Sanmina SCI India Private Limited (“SIPL”), the Company’s existing Indian manufacturing entity, as a joint venture to engage in manufacturing in India of telecommunications equipment, data center and internet equipment, medical equipment, clean technology equipment and other high-tech equipment.

Pursuant to the terms of the SSPA, RSVL will acquire shares of SIPL such that immediately after the closing of the transaction, RSVL will hold 50.1% of the outstanding shares of SIPL and the Company will hold 49.9% of the outstanding shares of SIPL. The Company expects the transaction to close during the fourth quarter of 2022.

Acquisition

On April 6, 2021, the Company purchased all outstanding stock of a European subsidiary of a multinational company in the industrial end market. This acquisition increased the Company’s IMS capabilities in Europe. The Company also entered into a master supply agreement with the seller in connection with this acquisition. Total consideration paid for this acquisition was $38 million of cash, of which $29 million was paid upon closing and $9 million is due in April 2023. The acquiree had $8 million of cash as of the acquisition date, resulting in a net cash outlay upon closing of $21 million. The pro-forma effect of the acquisition, as if it had occurred at the beginning of the year, was not material to the consolidated financial statements. The acquisition is reported in the Company’s IMS reportable segment.

The Company’s allocation of the purchase price was based on management’s estimate of the acquisition-date fair

values of the tangible and identifiable intangible assets acquired and liabilities assumed.

The following represents the allocation of the purchase price to the acquired assets and liabilities assumed.

	(In thousands)
Current assets, including cash acquired of $8.1 million	$	18,696
Noncurrent assets, including identifiable intangible assets of $4.4 million and goodwill of $8.5 million	30,711
Current liabilities	(10,671)
Noncurrent liabilities	(152)
Total net assets acquired	$	38,584

Goodwill reflects the expectation that the acquisition enables the Company to increase its IMS capabilities in Europe. Goodwill and identifiable intangible assets are recorded in other non-current assets on the condensed consolidated balance sheets. Identifiable intangible assets are being amortized over four years.