Deal values UK company at £104million

After a year of to and fro in the press, Marine electronics firm Garmin Ltd has made a cash offer to purchase its rival, Raymarine, for 15p per share, according to IBI News.

If the deal is approved, approximately £12.5m would be payable by Garmin to Raymarine shareholders, as well as the repayment of Raymarine’s last published net debt figure of £91.6m, implying an enterprise value of £104.1m.

Raymarine was floated on the London Stock Exchange in December 2004 at a price of 152p per share. The Raymarine share price peaked in April 2007 at a price of 490p per share.

Following the decline in world financial markets in 2008, demand for marine electronic products of the type manufactured by Raymarine, Garmin and other market participants fell significantly. Raymarine is focused exclusively on this market and entered this downturn with a significant level of debt.

Garmin has in excess of 8,000 employees worldwide.
Garmin’s shares are traded on the NASDAQ stock market with a market capitalisation of approximately $7.5bn.

For the 52-week financial period ended 26 December 2009, Garmin reported net sales of $2.95bn, income before taxes of $809m and net income of $704m.

The Raymarine board had publicly cast doubt on Garmin’s ability to secure the necessary anti-trust approvals but Garmin estimates the combined worldwide market share of Raymarine and Garmin to be below 30 per cent and therefore below the level at which competition concerns are typically thought to arise.

It is Garmin’s opinion that the acquisition of Raymarine will intensify competition in the worldwide marine electronics market and that customers will continue to enjoy, and benefit from, a wide choice of high quality products.