Simrad Yachting announces Lowrance merger agreement
By IBI Magazine
Simrad Yachting AS has entered into a merger agreement with Lowrance Electronics.
Simrad Yachting will buy all of the outstanding shares of Lowrance at US$37 per share. The acquisition price represents an enterprise value for Lowrance of around US$215 million and a premium of 48 per cent over the closing price of its shares on January 27, 2006.
Under the terms of the merger, Navico Acquisition Corp, a newly formed wholly owned subsidiary of Simrad Yachting, will commence a cash tender offer for all the outstanding shares and complete a second step merger at the same price.
The tender offer will be subject to a majority minimum tender condition and other customary conditions, but will not be subject to any financing conditions.
Following the tender offer and the merger, Lowrance will become a wholly owned subsidiary of Simrad Yachting.
Lowrance's board of directors has unanimously approved the merger agreement, tender offer and merger, and recommended that Lowrance's stockholders tender their shares into the tender offer.
Lowrance is one of the world's largest providers of marine electronics to leisure boats and has a particularly strong presence in the fishfinders and GPS navigation systems segments of the market.
Additionally, the company has produced hand-held GPS mapping products for campers and hikers as well as GPS navigation systems for the automotive and aviation markets for more than 10 years.
Simrad Yachting provides marine electronics to high-end leisure boats and smaller commercial vessels. It is owned by Altor 2003 Fund, a Nordic-based private equity fund advised by Altor Equity Partners and Kongsberg Gruppen, a Norwegian-based maritime electronics and defense company.
Simrad Yachting and Lowrance are highly complementary in terms of their current product offerings, segment focus and geographic footprints. Because there is very little overlap in these areas, the merger is not expected to face significant regulatory hurdles or result in significant staff reductions.
Simrad Yachting believes the complementary products and geographic presence of the two companies will create a strong platform for future growth for the combined company.
Darrell Lowrance, the current chairman and chief executive officer of Lowrance who founded the company in 1957 and is still its largest shareholder, will become the chief executive officer of the combined company.
Jan Berner, the current chief executive officer of Simrad Yachting, will become deputy chief executive officer and lead the integration work.
Darrell Lowrance and Ronald Weber, executive vice president of engineering and manufacturing of Lowrance, have each entered into agreements with Simrad Yachting to tender their shares (representing 16 per cent of the outstanding shares) into the tender offer.
(31 January 2006)
|
