Simrad Yachting AS and Lowrance Electronics, Inc. (Nasdaq: LEIX) announced today that Simrad Yachting has agreed to acquire all of the outstanding shares of Lowrance for USD 37.00 per share. The acquisition price represents an enterprise value for Lowrance of approximately MUSD 215 and a premium of 48 percent over the closing price of its shares on Friday, January 27, 2006.
Under the terms of a merger agreement entered into by the parties, Navico Acquisition Corp., a newly formed wholly owned subsidiary of Simrad Yachting, will commence a cash tender offer for all of the outstanding shares of Lowrance at USD 37.00 per share and will 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. After the tender offer and the merger, Lowrance will become a wholly owned subsidiary of Simrad Yachting.
The board of directors of Lowrance 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 fish finders and GPS navigation systems segments of the market. In addition to marine electronic products, Lowrance has produced for over 10 years hand held GPS mapping products for campers and hikers as well GPS navigation systems for the automotive and aviation markets.
Simrad Yachting is a leading provider of marine electronics to high-end leisure boats and smaller commercial vessels. Simrad Yachting is owned by Altor 2003 Fund, a Nordic based private equity fund advised by Altor Equity Partners AB, 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. Mr. 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% of the outstanding shares) into the tender offer.
I believe the merger with Simrad Yachting is in the best interests of our company and shareholders. The combination of Simrad Yachting and Lowrance will be able to leverage the technology and market position Lowrance has worked hard to develop over the last 48 years and will create additional opportunities for our employees and customers in the future. Simrad Yachting has a long history of providing high-quality marine electronics products to the commercial and high-end leisure markets and, through B&G, is the world’s leading provider of steering equipment and electronics for sail boats. We believe the existing product lines of Simrad Yachting and Lowrance are highly complementary, said Mr. Lowrance.
We in Simrad Yachting have learned to know Lowrance over some time, and are very impressed by the company, its management and what it has achieved. We look forward to combining the strengths of two great companies, said Mr. Hugo Maurstad, Chairman of the Board of Simrad Yachting.
Lowrance was advised by JP Morgan and Locke Liddell & Sapp LLP.
Simrad Yachting was advised by Goldman, Sachs & Co., Sullivan & Cromwell LLP, PricewaterhouseCoopers LLP and McKinsey & Company, Inc.