(Finance) – Jabilan American multinational electronics company, has concluded the transaction to sell its Mobility business to BYD Electronic in a cash transaction worth 2.2 billion of dollars. The company previously announced the signing of a definitive agreement for the transaction on September 26, 2023.
“We are pleased to successfully conclude this transformative agreement and I am confident that this is the right step forward for Jabil – said the CEO Kenny Wilson – The net proceeds will allow us to improve our shareholder-centric capital framework, including incremental share buybacks. Furthermore, it will provide opportunities for further investment in key areas of our business.”
The second quarter guidance provided on 14 December 2023 assumed a closing date of 31 January 2024 for the sale. With the early closing of the transaction, Jabil now expects the midpoint of its previous guidance range for net revenue and core earnings per share for the second quarter to be approximately $400 million and $0.30 lower, respectively, on which is in line with the expectations the company outlined in its first-quarter earnings call.
“I am pleased to close the transaction and receive the net proceeds ahead of schedule,” he said CFO Mike Dastoor – Early closing and receipt of funds will allow us to begin initiating plans to reduce stranded costs and execute a series of accelerated repurchases during fiscal 2024. As a result, we expect to fully utilize our existing $2.5 billion repurchase authorization this fiscal year. These actions give me confidence that we will be able to offset lower revenue in the second quarter and deliver fiscal 24 core earnings above $9 per share.”