REL: 0834 HRS Rakon Limited
ASSET: RAK: Rakon announces sale of it's UK commodity business
Rakon has announced it plans to sell the assets of Rakon's commodity
business, based in Crewkerne UK to IQD Frequency Products Limited. This
business is largely involved in the sourcing and supply of mass market
components, not manufactured by Rakon, to the European market.
Rakon Managing Director, Brent Robinson, said this was a logical step in
Rakon's growth plans, and the business was quite different to Rakon's design
and manufacturing operations.
"The Crewkerne business was included as part of our acquisition of the
frequency control products division of C-Mac MicroTechnology in March 2007.
Following this acquisition, we undertook a strategic review to determine what
value the commodity trading business could add to the Rakon group."
"We determined that Rakon was better to focus its full resources on the
substantial opportunities ahead by growing our enlarged manufacturing
business. Similarly we concluded that the commodity business would be better
served by owners and management focussing specifically on the needs and
opportunities of that business."
The new IQD will maintain a very close working relationship with Rakon and
both companies will continue to supply each other with components. Rakon's
other European operations in Lincoln, Harlow and Argenteuil are unaffected by
"Apart from some local customers seeing a name change we don't expect there
to be any impact on our existing customer base," explained Mr. Robinson. "We
will still offer the same broad product range to our strategic customers that
we always have and IQD will continue to supply Rakon products to their
The new company will retain the existing management and staff of the current
Crewkerne operation with the transfer expected to be concluded at the end of
The proceeds from the sale will be equivalent to the value of the assets
held. The business accounted for approximately 9% of Rakon's revenue and 3%
of earnings in the 2008 financial year.
Rakon will release its Full Year 2008 results on the 22nd of May, accompanied
by an update on operations.
End CA:00164715 For:RAK Type:ASSET Time:2008-05-16:08:34:14