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Exhibit 99.1
[COBRA LETTERHEAD]
FOR IMMEDIATE RELEASE
Investor Contact: Gerald M. Laures
Vice President - Finance
Cobra Electronics Corporation
773-804-6216
[email protected]
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Media Contacts: Larry Larsen
Fleishman-Hillard
312-751-3617
[email protected]
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Jessica Heine
Fleishman-Hillard
312-932-2801
[email protected]
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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 (Nasdaq: 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
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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
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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.
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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.
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[COBRA LETTERHEAD] [LOWRANCE LETTERHEAD]
COBRA ELECTRONICS PROFILE
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TICKER NASDAQ: COBR
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Incorporated 1961
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President and CEO Jim Bazet
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Leadership Number one in radar detection and Citizens
Band radios, strong number two in Family
Radio Service (FRS) two-way mobile radios
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International Reach 32 countries
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Company Locations
- Headquarters - Chicago, Illinois
- Overseas Presence - Dublin, Ireland & Hong Kong
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Employees 135
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Distribution 8 of the top 10 consumer electronics
retailers, the "Big Three" office
suppliers, Wal-Mart, Kmart, Costco & Sam's
Club
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Sales $118.7 million (1999); $95.7 million for
the nine months ending 9/30/2000
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Net Income $4.0 million (1999); $4.2 million for the
nine months ending 9/30/2000
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EBITDA $8.1 million (1999); $8.9 million for the
nine months ending 9/30/2000
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Web site www.cobraelectronics.com
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LOWRANCE ELECTRONICS PROFILE
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TICKER NASDAQ: LEIX
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Incorporated 1958
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Founder, president and CEO Darrell Lowrance
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Leadership Number one in marine and recreational
SONAR, leader in marine and recreational
GPS
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International Reach 60 countries
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Company Locations
- Headquarters - Tulsa, Oklahoma
- Manufacturing Facility - Ensenada, Mexico
- Overseas Presence - Toronto, Canada & Sydney, Australia
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Employees 887
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Distribution OEMs, marine dealers and distributors &
sporting goods stores
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Sales $73.2 million
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Net Income $4.7 million (excluding severance and
merger costs)
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EBITDA $7.8 million (excluding severance and
merger costs)
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Web site www.lowrance.com
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