Simrad Yachting extends Tulsa-based Lowrance Electronics offer again

Journal Record, The (Oklahoma City), Mar 7, 2006 by Kirby Lee Davis

With 86.2 percent of Lowrance Electronics stock in hand, Simrad Yachting decided Monday to extend its tender offer a second time.

Company officials hope this midnight Wednesday extension will allow Horten, Norway-based Simrad to reach 90 percent or more ownership, a level that would ease the acquisition process.

The first extension, which ended at midnight Friday, left 4,425,873 Lowrance common shares validly tendered, including 47,088 shares subject to guaranteed delivery.

On Jan. 30, Simrad launched its $215 million buyout of Lowrance at $37 a share. The Nasdaq stock closed Monday down 1 cent at $36.96. Volume totaled 1,927 shares.

Simrad's original offer closed at midnight Feb. 28 with 80 percent of Lowrance's outstanding stock in the hands of Navico Acquisition Corp., a Simrad subsidiary established to hold the shares.

Once the extensions end, Navico will acquire the remaining shares by merging into Lowrance, as per Delaware law. Each share of Lowrance stock will then be canceled and the stock will stop trading.

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

Negotiations continue toward settling a shareholder lawsuit challenging the takeover in Tulsa federal court. Under the agreement being finalized, Lowrance said, Simrad, Navico and their advisors would be released from all claims. Lowrance has made additional SEC disclosures addressing the lawsuit's complaints and agreed to not oppose a $325,000 fee application by the plaintiff's attorneys - the firms Federman and Sherwood of Oklahoma City and Schiffrin and Barroway of Radnor, Penn.

Following the merger, Lowrance 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 his 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.

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

Lowrance (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 for campers and hikers, 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 maritime electronics and defense company.