tbomn
01-07-2001, 11:25 AM
This just out on Friday of last week. If this comes true, I hope that the service and warranty work on Lowrance products doesn't suffer. I have had a couple of bad experiences with Cobra products and warranty situations.
COBRA ELECTRONICS TO ACQUIRE LOWRANCE ELECTRONICS
Acquisition Secures Cobra's Leadership in Complementary Markets and Expands its Global Reach
CHICAGO, Illinois, and TULSA, Oklahoma, January 5, 2001 - Cobra Electronics Corporation
(Nasdaq: COBR) and Lowrance (asdaq: LEIX) today announced the signing of a definitive agreement
under which Cobra will purchase all of the outstanding shares of common stock of Lowrance at $8.25
per share in cash. The acquisition brings together premier companies from the two-way mobile
communications, SONAR, marine and recreational GPS businesses, combining their
complementary products and customers and extending Cobra's global reach. The transaction values
Lowrance at approximately $53 million, including the assumption of debt anticipated at the time of
closing. The acquisition will significantly increase Cobra's revenues as Lowrance's fiscal 2000
revenues exceeded $73 million.
Under the agreement, which has been approved by the boards of directors of both companies, Cobra
will commence a tender offer no later than January 16, 2001 for all of the outstanding shares of
Lowrance's common stock. Stockholders owning approximately 54.3 percent of Lowrance's
outstanding shares of common stock have entered into agreements to tender their shares pursuant
to the tender offer.
The offer is subject to customary conditions, including the tender of at least 63 and 1/3 percent of
Lowrance's outstanding shares of common stock. The tender offer is also conditioned on Cobra's
obtaining adequate financing. Cobra has agreed to the terms of senior bank financing with LaSalle
Bank, GE Capital and BT Commercial in the amount of $85 million. Cobra has also agreed to the
terms of subordinated financing with American Capital Strategies in the amount of $15 million. The
proceeds from financing will provide necessary funds for the transaction as well as refinance Cobra's
existing working capital and letter of credit requirements. Both the senior bank and the subordinated
financing are subject to negotiation and the execution of definitive agreements and other financing
conditions. The financing transactions and the acquisition are anticipated to close in February 2001.
"This acquisition secures a leading position for Cobra in the marine and recreational Global
Positioning System (GPS) and SONAR businesses, both of which provide significant, profitable
growth opportunities," said Jim Bazet, president and chief executive officer of Cobra Electronics.
"The acquisition offers us tremendous strategic growth opportunities in terms of new product
development, distribution and manufacturing. It also positions us with superior technology in GPS,
SONAR and navigational mapping software."
Cobra and Lowrance have each successfully positioned themselves in high-growth markets. Cobra is
a strong number two player in the estimated $300 million Family Radio Service (FRS) business - one
of the fastest growing segments of two-way mobile communications. Lowrance is a leader in the
marine and recreational GPS market. Boaters and outdoor enthusiasts use GPS to determine
location and navigation information based on satellite data. According to Allied Business Intelligence,
the worldwide commercial GPS market, including the markets in which Lowrance participates, is
expected to grow from an estimate of nearly $5 billion in 1999 to an estimate of nearly $14 billion in
2005, nearly tripling over the six year period.
The companies will also bring together leadership in complementary businesses. Cobra is the leader
in the Citizens Band radio and radar detection markets. Lowrance is the number one player in the
marine and recreational SONAR market. SONAR refers to the technology that detects bottom
contours, depth and the presence of fish below water.
"The Lowrance acquisition supplements Cobra's strong internal growth and continues the momentum
of our transformation. It fits with our growth strategies to aggressively expand internationally, extend
domestic distribution channels, develop leadership positions in complementary markets, and pursue
strategic acquisitions," said Jim Bazet. For the first nine months of 2000, Cobra increased its sales
by 19 percent and its net income by over 140 percent.
"Like Cobra, Lowrance has a 40-year track record of innovation and a reputation that stands for
quality and technological leadership," said Darrell Lowrance, co-founder, president and chief
executive officer of Lowrance. "The deal joins complementary companies, combines Lowrance's
state-of-the-art technology with Cobra's superb marketing and distribution strengths, and secures
resources for Lowrance's expansion."
Through the acquisition, Cobra will have access to new channels, such as original equipment
manufacturers (OEMs), marine dealers and sporting goods stores. These channels will provide
opportunity for cross-channel product sales and marketing. Cobra products are currently distributed
through a strong, well-established network of approximately 300 retailers, including eight of the top
ten consumer electronics retailers, the "Big Three" office supply super-stores, and mass market
channels such as Wal-Mart, Kmart, Costco and Sam's Club. Additionally, the acquisition will expand
Cobra's international presence from 32 to 60 foreign countries, with strengthened distribution in
Canada, Europe and Australia.
The tender offer will be followed by a merger in which each share of Lowrance common stock not
tendered through the offer will convert to a right to receive $8.25 in cash. After the merger, Lowrance
will become a wholly owned subsidiary of Cobra.
"I am delighted that Darrell Lowrance and the entire senior management team will remain with the
company," said Jim Bazet. "Together, we will leverage our combined innovation, technology and
distribution strengths to build our global two-way mobile communications, SONAR and marine
navigation and recreational GPS businesses."
About Cobra Electronics
Forbes named Cobra Electronics Corporation (Nasdaq: COBR) to its list of "200 Best Small
Companies in America" in 2000. Cobra is a leading global manufacturer of two-way mobile
communications products, holding the number one or strong number two position in every major
market in which it does business. The Family Radio Service (FRS) business is one of the fastest
growing segments of two-way mobile communications, and Cobra is a leading FRS player in the
U.S., Canada and Europe. Cobra has a 40-year track record of innovation and award-winning
products, and leads the industry in developing technology applications that anticipate market
demand. To learn more about Cobra Electronics and its products, please visit the Cobra site at
http://www.cobraelectronics.com.
About Lowrance
Lowrance is the number one company in the marine and recreational SONAR market and has a
leading position in the marine and recreational Global Positioning System (GPS) business. With over
43 years of proprietary design and manufacturing expertise and 50 U.S. patents, Lowrance's
technology has revolutionized the consumer GPS and SONAR industries. Lowrance markets under
the brand names "Lowrance" and "Eagle" in 60 countries. To learn more about Lowrance and its
products, please visit the Lowrance site at http://www.lowrance.com.
This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of
Lowrance. At the time a subsidiary of Cobra commences its offer, it will file a Tender Offer Statement
with the Securities and Exchange Commission and Lowrance will file a Solicitation/Recommendation
Statement with respect to the offer. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER
TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS)
AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER. The offer to purchase, the related Letter of Transmittal and certain other
offer documents, as well as the Solicitation/Recommendation Statement will be made available to all
stockholders of Lowrance, at no expense to them. The Tender Offer Statement (including the Offer to
Purchase, the related Letter of Transmittal and all other offer documents filed with the Commission)
and the Solicitation/Recommendation Statement will also be available for free at the Commission's
Web site at www.sec.gov.
The statements in this release concerning Cobra's sales and profit growth are forward-looking
statements that involve certain risks and uncertainties, including the acceptance of Cobra's new and
existing products by customers, continued success of Cobra's cost containment efforts and
continuation of key distribution channel relationships. These forward-looking statements are based
on assumptions that Cobra believes to be reasonable. No assurance can be given that the
assumptions will prove to be correct, and the difference between assumptions and actual results
could be material.
COBRA ELECTRONICS TO ACQUIRE LOWRANCE ELECTRONICS
Acquisition Secures Cobra's Leadership in Complementary Markets and Expands its Global Reach
CHICAGO, Illinois, and TULSA, Oklahoma, January 5, 2001 - Cobra Electronics Corporation
(Nasdaq: COBR) and Lowrance (asdaq: LEIX) today announced the signing of a definitive agreement
under which Cobra will purchase all of the outstanding shares of common stock of Lowrance at $8.25
per share in cash. The acquisition brings together premier companies from the two-way mobile
communications, SONAR, marine and recreational GPS businesses, combining their
complementary products and customers and extending Cobra's global reach. The transaction values
Lowrance at approximately $53 million, including the assumption of debt anticipated at the time of
closing. The acquisition will significantly increase Cobra's revenues as Lowrance's fiscal 2000
revenues exceeded $73 million.
Under the agreement, which has been approved by the boards of directors of both companies, Cobra
will commence a tender offer no later than January 16, 2001 for all of the outstanding shares of
Lowrance's common stock. Stockholders owning approximately 54.3 percent of Lowrance's
outstanding shares of common stock have entered into agreements to tender their shares pursuant
to the tender offer.
The offer is subject to customary conditions, including the tender of at least 63 and 1/3 percent of
Lowrance's outstanding shares of common stock. The tender offer is also conditioned on Cobra's
obtaining adequate financing. Cobra has agreed to the terms of senior bank financing with LaSalle
Bank, GE Capital and BT Commercial in the amount of $85 million. Cobra has also agreed to the
terms of subordinated financing with American Capital Strategies in the amount of $15 million. The
proceeds from financing will provide necessary funds for the transaction as well as refinance Cobra's
existing working capital and letter of credit requirements. Both the senior bank and the subordinated
financing are subject to negotiation and the execution of definitive agreements and other financing
conditions. The financing transactions and the acquisition are anticipated to close in February 2001.
"This acquisition secures a leading position for Cobra in the marine and recreational Global
Positioning System (GPS) and SONAR businesses, both of which provide significant, profitable
growth opportunities," said Jim Bazet, president and chief executive officer of Cobra Electronics.
"The acquisition offers us tremendous strategic growth opportunities in terms of new product
development, distribution and manufacturing. It also positions us with superior technology in GPS,
SONAR and navigational mapping software."
Cobra and Lowrance have each successfully positioned themselves in high-growth markets. Cobra is
a strong number two player in the estimated $300 million Family Radio Service (FRS) business - one
of the fastest growing segments of two-way mobile communications. Lowrance is a leader in the
marine and recreational GPS market. Boaters and outdoor enthusiasts use GPS to determine
location and navigation information based on satellite data. According to Allied Business Intelligence,
the worldwide commercial GPS market, including the markets in which Lowrance participates, is
expected to grow from an estimate of nearly $5 billion in 1999 to an estimate of nearly $14 billion in
2005, nearly tripling over the six year period.
The companies will also bring together leadership in complementary businesses. Cobra is the leader
in the Citizens Band radio and radar detection markets. Lowrance is the number one player in the
marine and recreational SONAR market. SONAR refers to the technology that detects bottom
contours, depth and the presence of fish below water.
"The Lowrance acquisition supplements Cobra's strong internal growth and continues the momentum
of our transformation. It fits with our growth strategies to aggressively expand internationally, extend
domestic distribution channels, develop leadership positions in complementary markets, and pursue
strategic acquisitions," said Jim Bazet. For the first nine months of 2000, Cobra increased its sales
by 19 percent and its net income by over 140 percent.
"Like Cobra, Lowrance has a 40-year track record of innovation and a reputation that stands for
quality and technological leadership," said Darrell Lowrance, co-founder, president and chief
executive officer of Lowrance. "The deal joins complementary companies, combines Lowrance's
state-of-the-art technology with Cobra's superb marketing and distribution strengths, and secures
resources for Lowrance's expansion."
Through the acquisition, Cobra will have access to new channels, such as original equipment
manufacturers (OEMs), marine dealers and sporting goods stores. These channels will provide
opportunity for cross-channel product sales and marketing. Cobra products are currently distributed
through a strong, well-established network of approximately 300 retailers, including eight of the top
ten consumer electronics retailers, the "Big Three" office supply super-stores, and mass market
channels such as Wal-Mart, Kmart, Costco and Sam's Club. Additionally, the acquisition will expand
Cobra's international presence from 32 to 60 foreign countries, with strengthened distribution in
Canada, Europe and Australia.
The tender offer will be followed by a merger in which each share of Lowrance common stock not
tendered through the offer will convert to a right to receive $8.25 in cash. After the merger, Lowrance
will become a wholly owned subsidiary of Cobra.
"I am delighted that Darrell Lowrance and the entire senior management team will remain with the
company," said Jim Bazet. "Together, we will leverage our combined innovation, technology and
distribution strengths to build our global two-way mobile communications, SONAR and marine
navigation and recreational GPS businesses."
About Cobra Electronics
Forbes named Cobra Electronics Corporation (Nasdaq: COBR) to its list of "200 Best Small
Companies in America" in 2000. Cobra is a leading global manufacturer of two-way mobile
communications products, holding the number one or strong number two position in every major
market in which it does business. The Family Radio Service (FRS) business is one of the fastest
growing segments of two-way mobile communications, and Cobra is a leading FRS player in the
U.S., Canada and Europe. Cobra has a 40-year track record of innovation and award-winning
products, and leads the industry in developing technology applications that anticipate market
demand. To learn more about Cobra Electronics and its products, please visit the Cobra site at
http://www.cobraelectronics.com.
About Lowrance
Lowrance is the number one company in the marine and recreational SONAR market and has a
leading position in the marine and recreational Global Positioning System (GPS) business. With over
43 years of proprietary design and manufacturing expertise and 50 U.S. patents, Lowrance's
technology has revolutionized the consumer GPS and SONAR industries. Lowrance markets under
the brand names "Lowrance" and "Eagle" in 60 countries. To learn more about Lowrance and its
products, please visit the Lowrance site at http://www.lowrance.com.
This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of
Lowrance. At the time a subsidiary of Cobra commences its offer, it will file a Tender Offer Statement
with the Securities and Exchange Commission and Lowrance will file a Solicitation/Recommendation
Statement with respect to the offer. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER
TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS)
AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER. The offer to purchase, the related Letter of Transmittal and certain other
offer documents, as well as the Solicitation/Recommendation Statement will be made available to all
stockholders of Lowrance, at no expense to them. The Tender Offer Statement (including the Offer to
Purchase, the related Letter of Transmittal and all other offer documents filed with the Commission)
and the Solicitation/Recommendation Statement will also be available for free at the Commission's
Web site at www.sec.gov.
The statements in this release concerning Cobra's sales and profit growth are forward-looking
statements that involve certain risks and uncertainties, including the acceptance of Cobra's new and
existing products by customers, continued success of Cobra's cost containment efforts and
continuation of key distribution channel relationships. These forward-looking statements are based
on assumptions that Cobra believes to be reasonable. No assurance can be given that the
assumptions will prove to be correct, and the difference between assumptions and actual results
could be material.