REL: 0830 HRS Rakon Limited
TRANSACT: RAK: Rakon confirms buyout of Centum Rakon India
30 April 2018
Rakon confirms buyout of Centum Rakon India
Rakon Limited (NZX: RAK) today confirmed it will take full control of the
Centum Rakon India joint venture operations following the signing of an
agreement for the buyout of its 51% partner Centum Electronics Limited.
Centum Rakon India manufactures high-performance frequency control products
primarily for the telecommunications market, most of which are sold through
Rakon's French subsidiary to telecom network and equipment manufacturers.
Rakon Chief Executive Officer and Managing Director Brent Robinson said
bringing Centum Rakon India under Rakon's full control is an exciting
"It now gives us flexibility to invest further into the capability of its
manufacturing plant. It will allow us to leverage the full potential of what
is a high quality low-cost operating platform suitable for growth and provide
the unconstrained ability to align the business with our international
operations. Additionally, it gives us direct access to the growing market in
This investment will be value accretive for Rakon with a base case payback
during year three.
"Over time we expect further benefits to arise as we leverage on the
opportunities that this platform makes available to our R&D bases in the UK,
France and New Zealand".
Mr Robinson said it will be business as usual for Centum Rakon India's
employees, customers and suppliers.
As announced in February 2018, consideration for the 51% shareholding that
Rakon is buying is US$5.5 million, which will be funded through existing
resources. The price includes a final payment of US$1.375 million which will
be made after a warranty period of 18 months.
Settlement of the initial payment and transition of control of the Centum
Rakon India business is anticipated on 2 May 2018, when the transaction is
expected to close.
Chief Executive Officer
- ends -
Simon Bosley (Chief Financial Officer)
+64 9 571 9206
Louise Howe (Media Liaison)
+64 21 206 0985
End CA:00317290 For:RAK Type:TRANSACT Time:2018-04-30 08:30:59