David Dunbar: There’s a little bit of customer overlap, but their customers, they have a high concentration in selling relays into automated test equipment. So if you think of putting in place a manufacturing process for 5G products or even battery management systems or smart grid products these things only to be tested. As they get more complex, there are more testing points and when you think of it is for every testing point you need to relay. So the design of — this test equipment depends on a lot of relays. The Sanyu team has worked with those test and measurement companies to design these pieces of test equipment and developed kind of application knowledge there that’s deeper than our knowledge in the test and measurement.
So we see it as complementary both in the customer base they bring and the application expertise they bring. And we will look at the markets they service. When we talk about our Fast growth markets, smart grid, EVs, 5G, the growth in those markets also pulls through business in this test and measurement equipment, although we don’t report it, but it’s kind of a secondary effect of this growth markets. So it’s, our best product line already the relays. This strengthens our position globally. It brings us new application expertise and some new customers.
Gary Prestopino: Thank you. Can you give us some idea of the revenues? Or you can’t until you actually close it?
David Dunbar: Yes. So the way to think about that is if you rewind to April when we announced the sale of Procon a few months after that we announced Minntronix and for less than half the proceeds from Procon we replaced the sales, and in the first, you will replace the operating income from Procon. For about the same price now if you add Minntronix and Sanyu, we more than doubled the revenue we’ve lost and the operating income we lost to Procon. And with the extra proceeds, we’ve increased our dividend and bought back shares. So I know we are talking a little bit of code there, but you can think of this is roughly the size of Minntronix and sales and operating income potential.
Ademir Sarcevic: And I think Gary if I can just add to that. You know it does give us some much better growth potential than what we had with Procon. So we replaced those proceeds in two businesses, a double revenue and operating income in the first year of ownership with a double ROIC — with a double-digit ROIC with a great growth potential over the long term. So we feel pretty good about it.
Gary Prestopino: Okay. And then next couple of questions surround the Electronics segment. The applications that are impacting the sales growth and the operating profit growth. When you’re talking about appliances, I get that general industrial what end markets are being served there?
David Dunbar: Well, these reed switches wind their way into everything from you know irrigation systems for your in-ground irrigation systems, commercial building construction security systems contain a lot of reed switches. Level and measurement systems in tanks that contain liquids in process plants. So I think and that’s why we use the term general industry there are many, many, many, many end applications.
Gary Prestopino: Okay. I mean are you serving the same applications in the United States too, North America?
David Dunbar: Yes. Although yes, there is much more volume in China for many of those applications and we tend to, I guess you just think about the manufacturing based in North America, tend to be higher value-add products and more sophisticated products. So we haven’t seen the impact in our reed switch sales into North America but that’s a smaller end market.
Gary Prestopino: Would this business have shown an increase in adjusted operating income x-ing out the issues that are in China and Europe in appliances and general industrial?
