Bluegum Group – 1998 to 2000
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In 1998, The Merkin Group provided and facilitated $12 million investment capital to Bluegum Group Ltd and co-facilitated a $72 million ANZ facility to become a founding shareholder. Sean Rothsey was appointed executive director in the MBO of IBM’s Australian manufacturing facility at Wangaratta.
Bluegum subsequently purchased Alcatel’s Liverpool manufacturing operation, to create an outsourced electronics contract manufacturer. Making computer servers, mainframes, telephone equipment, defence equipment, the company also provided contract ADSL and photonics research.
In 2000, Sean Rothsey led negotiations for the sale of the business to Silicon Valley’s Solectron Inc, for $185 million, further assisting Solectron to secure a US $55 million facility with Bank of America.
The company was described by BRW Magazine as Australia’s 30th largest private company and the country’s largest electronics manufacturing company. At the time of sale, Bluegum was the 15th largest electronics manufacturing company in the world with revenue in excess of $1 billion, and nearly 1,000 staff. Solectron Corp (SLR) was subsequently acquired by FLEXTRONICS INTL (FLEX) (2007).