Lowrance electronics

Simrad Yachting acquires 80 percent of Tulsa-based Lowrance electronics

Journal Record, The ( Oklahoma City), Mar 2, 2006 by Kirby Lee Davis

Simrad Yachting has acquired a strong hold on Lowrance Electronics, but it wants - and will get - more.

Shareholders of Tulsa-based Lowrance turned in 4,105,658 shares when Simrad's tender offer expired at midnight Tuesday. That represented about 80 percent of Lowrance's outstanding shares.

Horten, Norway-based Simrad extended its tender offer until midnight Friday. Lowrance Chief Financial Officer Paul Murphy said Simrad hopes to gain at least 90 percent of Lowrance electronics stock, if not 100.

Over 90 simplifies things, he said, concerning the takeover of Lowrance electronics.

Murphy said a few large investors hold many of the outstanding shares.

After Friday's expiration date, the Simrad subsidiary Navico Acquisition Corp., which was established to hold the Lowrance shares, will acquire the remaining shares by merging into Lowrance Electronics, as under Delaware law. Each share of Lowrance electronics stock will then be cancelled and the stock will stop trading on Nasdaq.

Gaining 90 percent of Lowrance electronics stock would allow Simrad to expedite its takeover through a short-form merger procedure.

On Jan. 30, Simrad launched its $215 million buyout of Lowrance at $37 a share. The Nasdaq stock closed Wednesday unchanged at $36.95. Volume totaled 8,637 shares.

Simrad hired Mellon Investor Services LLC as depositary for the tender offer.

Following the merger, Lowrance electronics will expand its Tulsa operations with a 35,000-square-foot warehouse and distribution center alongside its headquarters. Construction could start by the middle of the year.

The firm now employs 250 at its 115,000-square-foot office at 12000 E. Skelly Dr. It has 1,650 workers outside the United States, mostly at its Mexico manufacturing facility.

Darrell Lowrance, who founded the company in 1957 and serves as its chairman and chief executive, will become CEO of the combined company. Jan Berner, now CEO of Simrad Yachting, would become deputy chief and lead the integration work.

Murphy does not expect that effort to begin until after the companies complete the merger's legal paperwork.

Because there is little overlap in product lines, segment focus or geographic markets, officials expect the firms expect to benefit greatly from the combination.

Lowrance elecgronics (www.lowrance.com) manufactures and markets global positioning systems and fish finders for the leisure boat industry. It also sells hand-held GPS location systems, and navigation systems for the automotive and aviation markets.

It draws about 70 percent of sales from the United States and 20 percent from Europe.

Simrad (www.simradyachting.com) builds and sells marine electronics to high-end leisure boats and smaller commercial vessels under the brand names Simrad and B&G. Only 23 percent of its sales come from U.S. markets. Simrad is owned by Altor 2003 Fund, a Nordic- based private equity fund advised by Altor Equity Partners (www.altor.com), and Kongsberg Gruppen, a Norwegian-based company.