REL: 1110 HRS Rakon Limited
ASSET: RAK: Rakon expands European business
Rakon Limited (NZX: RAK) is pleased to announce another important step in its
ongoing building of a profitable growing Global Business.
Rakon's European business will acquire the assets of French based competitor
Temex for Euro 400k in a move that will provide significant acceleration for
Rakon's growth in the High Performance, High Reliability sectors, plus add
considerable IP and management depth to the European based teams.
"Temex is a 30+ year old business with exceptional technology and a blue chip
customer base which complements our existing European operations. This
acquisition will broaden our business and base of people, as well as
introduce new IP, customers and open new markets for us," explained Brent
Robinson, Rakon's CEO.
"Temex has excellent synergies with our existing operations in France and the
acquisition will significantly accelerate our plans to develop the high
performance OCXO markets in space, aviation, under-sea telecommunications,
mining exploration and defence which have excellent potential for Rakon."
"With Temex we gain penetration into some exciting applications, such as the
Galileo navigation satellites and transportation vehicles for the
International Space Station, as well as various aviation programs. The
volumes in these may not be large in themselves but the value is very high
and enables us to further develop cutting edge technology which can then be
applied to higher volume markets," said Mr Robinson.
Mr Robinson says the price is a significant discount to book value and
reflective of the need to invest time and new expertise into bringing Temex
up to Rakon's exacting technical standards. The purchase will be funded out
of existing operating budgets.
"Initially the French operations we acquired back in 2007 were predominantly
focussed on the highly cost competitive telecommunications sector and to a
lesser extent the demanding but high value space and aerospace markets. Since
then we have successfully moved the high volume, lower margin
telecommunications products to our low production cost joint venture in
India. This Temex acquisition accelerates our planned expansion in France
into higher margin, very high performance applications," explained Mr
"Rakon's existing presence and focus in France means we will be able to
quickly integrate the Temex business and people into our overall operations
and gain synergies in both operations. Based upon Temex's existing revenue
of Euro 11 million per annum we expect the aggregated business will begin to
deliver modest returns in the near future and steadily grow over time as
improvements are made."
The transfer of assets is expected to occur in mid August 2010.
RAKON, Rakon is a world leader in the design and manufacture of a broad range
of frequency control solutions for high performance and high volume markets.
Headquartered in Auckland, New Zealand, Rakon is a global company with
manufacturing facilities in New Zealand, Europe, India and China. Rakon is
the world leader in the supply of crystal oscillators to the GPS market and
is also a leader in the supply to the telecommunications and aerospace
TEMEX, with more than 30 years of expertise in designing and manufacturing
high-performance and high-precision frequency products, is known worldwide in
the area of high precision and high reliability frequency solutions. Their
products are designed to operate in extremely demanding environmental
OCXO: Oven Controlled Crystal Oscillator. An electronic component used for
producing a very stable frequency. Typically performance is up to 1000 times
more stable than lower cost TCXOs and can approach the stabilities offered by
highly expensive atomic clocks.
End CA:00197509 For:RAK Type:ASSET Time:2010-07-22:11:10:10