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Sparton Acquires KEP Marine

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Sparton Corporation (NYSE:SPA) announced that its wholly owned subsidiary, Sparton IED, LLC completed the acquisition of KEP Marine, a $3 million revenue business, from Kessler-Ellis Products, Inc. on January 21, 2015 in an all-cash transaction.

Founded in 1960, KEP Marine, located in Eatontown, NJ, designs and manufactures industrial displays, industrial computers and HMI software for the Marine market. These product lines will be consolidated into the Aydin Displays facility, located in Birdsboro, PA.

“The addition of KEP Marine meets the criteria of our growth strategy by growing our ruggedized electronics platform with additional ruggedized display and industrial computers in the harsh and demanding marine market sector, diversifying our customer base and increasing utilization of our existing assets,” stated Cary B. Wood, president and chief executive officer of Sparton. “Additionally, KEP Marine brings solid, long term customer relationships that will benefit from Sparton’s expanded list of service offerings.”

“We are pleased to add KEP Marine into Aydin Displays, allowing us to further enhance our market position in the Marine market,” commented Art Mengel, general manager of Aydin Displays. “In the coming months we will be transitioning KEP’s customers to Birdsboro with an orderly and seamless approach, using contemporary tools such as Sparton’s New Product Introduction (NPI) and Advanced Product Quality Planning (APQP) processes.”

“This tuck-in acquisition is a great example of our strategy to maximize existing assets while expanding our ruggedized electronics product platform. Since there will not be an addition of significant fixed overhead in Birdsboro related to this transaction, we expect KEP Marine’s revenue to enhance the Company’s Manufacturing & Design Services segment EBITDA. Coupled with the IED acquisition in December, we expect that Aydin Displays’ revenue will increase by 30% and that the combined acquisitions will be accretive to earnings within the next nine to twelve months, once transitioning activities are completed,” Mr. Wood concluded.

The transaction was funded through Sparton’s borrowings under the credit facility currently in place.

About Sparton Corporation

Sparton Corporation (NYSE:SPA) , now in its 115th year, is a provider of complex and sophisticated electromechanical devices with capabilities that include concept development, industrial design, design and manufacturing engineering, production, distribution, field service, and refurbishment. The primary markets served are Medical & Biotechnology, Military & Aerospace, and Industrial & Commercial. Headquartered in Schaumburg, IL, Sparton currently has nine manufacturing locations and four engineering design centers worldwide. Sparton’s Web site may be accessed at www.sparton.com.

Safe Harbor and Fair Disclosure Statement

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: To the extent any statements made in this release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the difficulty of predicting future results, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in Sparton’s filings with the Securities and Exchange Commission (SEC). The matters discussed in this press release may also involve risks and uncertainties concerning Sparton’s services described in Sparton’s filings with the SEC. In particular, see the risk factors described in Sparton’s most recent Form 10K and Form 10Q. Sparton assumes no obligation to update the forward-looking information contained in this press release.

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