Rakon Limited (NZX: RAK) today confirmed it will take full control of the Centum Rakon India joint venture operations following the signing of an agreement for the buyout of its 51% partner Centum Electronics Limited. Centum Rakon India manufactures high-performance frequency control products primarily for the telecommunications market, most of which are sold through Rakon’s French subsidiary to telecom network and equipment manufacturers.
Rakon Chief Executive Officer and Managing Director Brent Robinson said bringing Centum Rakon India under Rakon’s full control is an exciting strategic decision.
“It now gives us flexibility to invest further into the capability of its manufacturing plant. It will allow us to leverage the full potential of what is a high quality low-cost operating platform suitable for growth and provide the unconstrained ability to align the business with our international operations. Additionally, it gives us direct access to the growing market in India.”
This investment will be value accretive for Rakon with a base case payback during year three.
“Over time we expect further benefits to arise as we leverage on the opportunities that this platform makes available to our R&D bases in the UK, France and New Zealand”.
Mr Robinson said it will be business as usual for Centum Rakon India’s employees, customers and suppliers.
As announced in February 2018, consideration for the 51% shareholding that Rakon is buying is US$5.5 million, which will be funded through existing resources. The price includes a final payment of US$1.375 million which will be made after a warranty period of 18 months.
Settlement of the initial payment and transition of control of the Centum Rakon India business is anticipated on 2 May 2018, when the transaction is expected to close.
Brent Robinson
Chief Executive Officer
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About Rakon
Rakon is a global high technology company and a world leader in its field. The company designs and manufactures advanced frequency control and timing solutions that provide the heartbeat of much of today’s communications and positioning technology. Rakon was founded in
Auckland in 1967 and is listed on the New Zealand stock exchange. For more information visit www.rakon.com
About Centum
Centum was founded in 1994 in Bangalore, India. Since then, Centum has rapidly grown into a diversified electronics company with operations in North America, EMEA and Asia. The company offers a broad range of products and services across different industry segments. It has continuously invested in strengthening its design & product development capabilities while developing deep domain knowledge in the segments it operates in. Centum has also established truly world-class manufacturing facilities with cutting edge infrastructure as well as a global supply chain capable of delivering products with high quality and reliability.
www.centumelectronics.com
