Cobra Acquiring Lowrance For $53M

BY BOB GERSON AND AMY GILROY -- TWICE, 1/29/2001

LAS VEGAS - Cobra Electronics announced at CES that it is looking to expand in both size and product reach through the acquisition of Lowrance Electronics, a maker of GPS and depth equipment for the marine and recreational markets, for $53 million in cash and depth/fish-finding assumption.

Tony Mirabelli, Cobra senior VP of marketing and sales, said the purchase will result a line of Cobra consumer-based GPS products to be offered later this year. He noted that while Lowrance has expertise in GPS, "they don't have experience in two-way communication, which we do."

He added, "There's a real synergy between the two companies. Lowrance is in the marine specialists and Cobra in CE mass channels. They have technology that could be very helpful to us, and the cycles of our two businesses are such that our key selling seasons fall in different times of the year.Eventually, we will incorporate GPS in our other products."

Subject to the closing of financing arrangements, Cobra plans to offer $8.25 in cash for each of Lowrance's approximately 3.77 million outstanding shares. The offer is to be made no later than Jan. 16. Insiders, holding about 54 percent of Lowrance's stock, have agreed to tender their shares. For the transaction to go through, Cobra's offer will have to attract more than 63 of the total outstanding shares.

Lowrance, which markets its depth/fish-finding gear under the SONAR brand, reported net earnings of $4.67 million on sales of $73.2 million in the fiscal year to July 31. Cobra, which had sales of $118.7 million in 1999, had a nine-month net last year of $1.76 million and revenue of $95.7 million.

Cobra president Jim Bazet said the acquisition "offers us tremendous strategic growth opportunities in terms of new product development, distribution and manufacturing," and provides "superior technology in GPS, SONAR and navigational mapping software." In addition, he said, it opens new sales channels for Cobra's lines of CB radios, radar detectors and FRS products.