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EXHIBIT 99.1
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[Cobra Logo]
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
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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 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
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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
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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 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
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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.
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
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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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