Cobra Electronics has entered an agreement to purchase Performance Products, a privately held, U.K.-based consumer electronics company for about $21.4 million plus two earnout payments totaling $15.8 million.
Performance Products makes GPS devices and speed camera detection systems that alert drivers when they are approaching a roadside speed detection camera. The acquisition is expected to help Cobra enter the speed camera detection market in both the U.S. and Europe and to gain distribution for all its products in Europe.
Cobra said Performance Products has a history of profitable operations generating about $14.8 million in revenues and $1.8 million in operating income after adjustments for the fiscal year ended March 31.
Performance Products, a family owned business since 1995, was originally a radar detector supplier but transitioned into speed camera detection and GPS because radar detection is in the process of being outlawed in the U.K.
Cobra believes that some of Performance Products' distribution in Europe will carry traditional Cobra products.
In the U.K., France and Denmark, Performance Products markets Snooper brand GPS devices that also offer speed camera detection when the user subscribes to a special service. The subscriber then gains access to Performance Products' continually updated database of speed camera locations.
The use of speed cameras is growing exponentially in U.K and is beginning to proliferate in France and Denmark as well as the U.S. where speed cameras are used in 161 cities, said Cobra president and CEO Jim Bazet.
In the U.S., Bazet said, “There's no doubt in our minds that this is where detection is headed.”
Cobra's senior VP/CFO Michael Smith said that portable GPS devices and camera locators will likely merge in the future.
TomTom also offers a GPS model with speed camera detection in Europe, although Performance Products says it is the only company that updates its database 24-hours a day. “And thousands of these camera move around per week,” Bazet said.
Cobra said it currently has a six percent market share in GPS devices in the U.S., a 60 percent share in the radar detector and CB markets and close to a 30 percent share in two-way radios.