NZ tech company Rakon is buying the assets of French rival Temex for €400,000 euros, ($NZ717,000) gaining access to satellite and space station transport applications to complement its existing European operations.
The price is a significant discount to book value, reflecting "the need to invest time and new expertise into bringing Temex up to Rakon's exacting technical standards," said chief executive Brent Robinson. "The purchase will be funded out of existing operating budgets."
Temex will add applications such as Galileo navigation satellites, transportation vehicles for the International Space Station and aviation programmes, he said. "The volumes in these may not be large in themselves but the value is very high and enables us to further develop cutting edge technology which can then be applied to higher volume markets."
Temex's existing annual revenue is €11 million and Rakon expects "the aggregated business will begin to deliver modest returns in the near future and steadily grow over time as improvements are made."
The assets of Temex would be transferred in mid-August.
Shares of Rakon last traded unchanged at 93 cents and have declined 21 per cent this year.
The Auckland-based company posted a loss of $5.4 million in the 2 months ended March 31, from a year-earlier profit of $4.5 million.
Still, it reported an improvement in the second half from the first half, reflecting a lift in consumer demand for GPS devices.
Robinson said at the time the results were released in May that the company's strategy was "expanding firstly into Europe and then into India and China, plus our investment in new technologies, puts us in a strong position to build strong bottom line growth now and in future."
Temex's products "are designed to operate in extremely demanding environmental conditions" and include the OCXO, or Oven Controlled Crystal Oscillator," which can produce a very stable frequency, approaching the stabilities offered by highly expensive atomic clocks, Rakon said.