Concord Camera Corp. announced that Concord Camera GmbH, a wholly owned subsidiary of Concord, acquired in an all-cash transaction 100 percent of the outstanding stock of Jenimage Europe GmbH from 4MBO International Electronic AG.
4MBO, a consumer electronics distributor, filed for insolvency protection on Feb. 27, 2004 in Germany. Jenimage, based in Jena, Germany, is a distributor of JENOPTIK-branded photographic and imaging products, including digital cameras, Advance Photo System (APS), and 35-mm cameras, binoculars, and accessories. Concord expects the acquisition to substantially expand its retail sales and distribution business in Germany and other parts of Europe. The total purchase price was 11.25 million euros (approx. U.S. $13.5 million).
In connection with the acquisition, Concord has entered into a 20-year, worldwide trademark license agreement with Jenoptik AG for the exclusive use of the JENOPTIK brand name and trademark on consumer imaging products, including, but not limited to, digital, single-use, and traditional cameras and other imaging products and related accessories. The acquisition cost of the license is 1.5 million Euros (approx. $1.8 million) and is not a prepayment of royalties. The license agreement provides for a royalty of 0.5 percent of net sales of consumer imaging products bearing the JENOPTIK brand name for the first 10 years of the license and a royalty fee of 0.6 percent for the second 10 years of the license. There are no minimum guaranteed royalty payments.
Concord GmbH said it is acquiring a strong balance sheet which, as of March 31, 2004, reflected net equity of approximately 15 million Euros (approx. $18.0 million) and no debt. For the calendar year ended Dec. 31, 2003, Jenimage had net sales of approximately $62.5 million and net income of approximately $1.1 million. The 2003 calendar year net income results included interest expense of approximately $1.5 million to 4MBO. Based upon a preliminary purchase price allocation, the purchase price is less than the net assets acquired resulting in Concord GmbH having negative goodwill as a result of the transaction.
Digital camera sales accounted for approximately 90 percent of Jenimage's $62.5 million of net sales for the calendar year ended Dec. 31, 2003. Concord's total European sales in fiscal 2003 were $41.7 million, of which $19.7 million was attributable to sales of digital cameras. Jenimage sells products to many major German and European wholesalers and retailers, including Metro AG (wholesaler), Plus Warenhandelgesellschaft GmbH (discounter), and Otto GmbH and Co, KG (mail order).
Concord GmbH and Jenimage say that the acquisition creates opportunities for improved operational efficiency and growth in sales and distribution operations in Germany and other parts of Europe.
"The combined market strength of Concord GmbH and Jenimage with Concord's product development, design, and manufacturing capabilities will enhance our position in the German and European marketplace," said Urs W. Stampfli, senior vice president and director of Global Sales and Marketing for Concord. "Concord has grown its business by investing in design, development, engineering, manufacturing, and marketing capabilities, and has now enhanced its retail sales and distribution business to capitalize on this significant market opportunity."
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