Beijer Electronics has acquired German HMI (human machine interface) business Elektronik-Systeme Lauer through its HMI Products business area from listed group Augusta Technologie ofGermany. Lauer generated sales of some EUR 12 m in 2006 and has 60 employees. The purchase price is approximately EUR 6 m. The acquisition was financed with cash.
Göran Sigfridsson, Beijer Electronics' CEO and President commented: "this acquisition is another milestone for Beijer Electronics. Lauer offers the group highly strategic positioning and enhances HMI Products' presence on the key German market, which represents 40 per cent of the European HMI products market."
Lauer, incorporated in 1979, is an established, well-recognized player with a strong brand in Germany and the rest of central Europe. The company has a broad range of proprietary operator terminals within the HMI area that complement Beijer Electronics' product range, mainly in the higher-end segment.
Lauer has a broad customer base in Germany, with its own sales resources, another two resellers in Germany and distributors in most European countries. The company's estimated market share in Germany is some 5 per cent. Lauer has some capacity for assembly and final fitting of HMI products; the majority of production is outsourced.
Lauer enjoyed healthy sales and profit performance in the first quarter of 2007, and estimates sales of some EUR 14 m in 2007, with about 80 per cent of sales made to the German market. However, profitability has been low for the last two years, and accordingly, in association with the transaction, Beijer Electronics has decided to implement a restructuring package, intended, in time, to raise profitability to the same level as the rest of the business area. This package, implying non-recurring expenses of some EUR 1.1 m, will reduce Beijer Electronics' earnings in 2007.
Apart from the restructuring package, Beijer Electronics has identified a series of coordination gains, mainly in development and production. There are also coordination gains in other segments. Beijer Electronics has had a presence in Germany since 2002 through its office in Stuttgart, where Lauer is also headquartered. Beijer Electronics has seven employees in Germany. Both organizations will be coordinated, offering more efficient administration and more integrated sales resources.
Additionally, Beijer Electronics will retain Lauer's strong brand and focus on cross-sales of the group's various brands through the global sales organization. Beijer Electronics has an estimated market share in Germany of some 8 per cent including Lauer, implying that the group is positioning as one of the German market's major vendors.
Lauer was a small part of the Augusta Technologie group and the company's divestiture is part of the new strategy Augusta has determined.
"In Beijer Electronics, Lauer will gain a strong owner focused on automation and HMI products with global coverage," continued Göran Sigfridsson, "which assures long-term progress and security."
Lauer will be consolidated into Beijer Electronics' accounts from 1 June 2007 onwards. The acquisition is expected to add approximately EUR 8 m to consolidated sales in the year. Excluding non-recurring expenses of EUR 1.1 m Lauer is expected to make a minor contribution to consolidated earnings per share in 2007.