January 10, 2006
Texas Instruments to Sell Attleboro Unit for $3 Billion
By Neil Downing, The Providence Journal, R.I.
Jan. 10--ATTLEBORO, Mass. -- For 47 years, the name Texas Instruments has been synonymous with Attleboro.The company has run one of the city's -- and the region's -- biggest and best-known manufacturing operations, employing generations of workers from Southeastern Massachusetts and Rhode Island.
That is about to change. Texas Instruments -- or TI, as the company is sometimes called -- said yesterday that it plans to sell its Attleboro-based Sensors & Controls unit to Bain Capital LLC of Boston in a transaction worth $3 billion.
No job cuts or other changes are planned, spokespeople for TI and Bain said.
If the deal is completed as planned, possibly in June, TI will cede ownership of Sensors & Controls, which has $1.1 billion in annual sales and about 5,400 employees worldwide, including 1,100 in Attleboro.
As a result, Texas Instruments (TXN:NYSE) will end its longstanding association with Attleboro, an association it has had since 1959, when it first acquired the business -- then known as Metals & Controls Corp.
TI's Attleboro operation will once again become an independent, standalone business -- much as it was when it was founded by industrialist Rathbun Willard 90 years ago as a gold-plating business to serve Rhode Island's jewelry industry.
"Now we're going to have control of our own destiny. . . . It's extremely exciting," said Thomas Wroe Jr., president of Sensors & Controls.
A spokesperson for Bain Capital said in a statement that there were no current plans for changes in operations, and that the management team expects the vast majority of Senors & Controls employees to continue in the same job, in the same place, with the same manager.
"We're going to try to make this as seamless as we can . . . for our customers, our employees and our suppliers," Wroe said in an interview at the company's headquarters.
Bain, a private equity investment firm, will become the sole investor in Sensors & Controls. "They're basically partners" in the transaction, Wroe said. "I don't see a lot of micromanagement in this."
The business will remain in Attleboro, and Wroe and other members of the Sensors & Controls management team will stay in place, as will the rest of the company's Attleboro work force, he said.
"We will stay here. There are no plans for any major changes. We've already gone through changes," Wroe said.
Texas Instruments' presence in Attleboro is not what it once was. Over the last 10 years or so, TI has gradually reduced the scale of its operations while increasing its presence in other countries.
At one time, the company had about 4,000 employees working in 23 buildings at a corporate campus off Pleasant Street (Route 123). Today, it has about 1,100 employees working in two buildings at the campus, Wroe said, a 100,000-square-foot operations building, and a new, 220,000-square foot facility -- a three-story building of brick and glass -- that serves as the business's world headquarters.
The company has manufacturing and other facilities in seven other countries: Holland, Japan, Mexico, Brazil, Malaysia, South Korea and China.
TI formerly owned the Attleboro corporate campus. But in late 2004, TI sold the campus to Preferred Properties, a real estate developer, and agreed to lease back property for its operations, Wroe said.
The Attleboro operation's customers formerly operated mainly in the United States. But as they have moved their operations to other countries -- mainly to Mexico and the Far East -- Sensors & Controls has had to adapt, he said. "Essentially, we've followed our customers," said TI spokeswoman Gail Chandler.
Today, only about 150 to 200 of the company's Attleboro-based employees are directly engaged in manufacturing, mainly in items used by the military, the government and aircraft that typically call for some U.S.-manufactured content, he said.
The rest of the Attleboro-based employees are involved in headquarters, research and development, marketing, engineering and finance operations, he said.
The company will continue to offer the same health, retirement and other employee benefits and compensation packages to its Attleboro work force, Wroe said.
In the short term, the company plans to increase the size of its Attleboro-based work force, adding people in the corporate services area to handle functions now run by the parent company, such as tax, legal, treasury and other functions, he said.
A new name for Sensors & Controls has not been chosen, he said.
Sensors & Controls makes devices used in automobiles, appliances and other applications. For example, its sensors gauge the fluid pressure in a vehicle's power steering and transmission units, and protect against overload or overheating in refrigerators, recessed lighting and other items in the home, Wroe said.
One of its most recently developed devices senses a passenger's weight in the passenger-side seat of a vehicle to determine whether an air bag should be deployed, he said.
The sale will allow TI to focus more on its business of chips that run mobile phones, according to Bloomberg News.
Bain Capital said it has more than $27 billion in assets under management. It has invested in more than 225 companies over the last two decades, including Domino's Pizza and Burger King Corp., the Associated Press reported.
Bain Capital was founded in 1984 by Mitt Romney, who later left the firm to enter politics. (He eventually became Massachusetts governor.) During Romney's unsuccessful campaign against U.S. Sen. Edward M. Kennedy, Bain was criticized for cutting jobs at a business it acquired; Romney contended that Bain had increased employment at the vast majority of firms it took over.
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