Magellan - Lowrance Merger
Sam Wormley
Magellan Corporation and marine
electronics leader Lowrance
Electronics Inc. to merge
-- $150 million consumer GPS-related business unit to
be established --
SANTA CLARA, CA -- March 12, 1999 --
Lowrance Electronics, Inc. (NASDAQ: LEIX) of
Tulsa, OK, will be merged into California-based
Magellan Corporation, a leading satellite access
products company, as a result of a merger
agreement among those companies and
Magellan's parent company Orbital Sciences
Corporation (NYSE: ORB). The transaction will
create a nearly $150 million, satellite-based,
consumer and recreational electronics business
under the Magellan banner, according to
Magellan Chairman and Orbital President and
CEO David W. Thompson.
"This acquisition reflects our strategy of growing
Magellan through market expansion and acquisition of
compatible technology companies. With approximately
$100 million in annual sales, Lowrance Electronics has
long been a leading player in the marine and
recreational electronics business, with a special expertise
in both GPS satellite navigation and sonar technology.
As such, Lowrance is a great fit with Magellan's already
strong position in satellite-based navigation and
communications products for marine, aviation, outdoor
recreation and general consumer electronics markets, as
well as a great addition to Magellan's technology
capabilities," Thompson noted.
"Lowrance is a leading-edge technology company
whose technical know-how in GPS and sonar can be
applied to emerging commercial and industrial
applications and integrated with other Magellan
technologies such as GPS satellite navigation and
ORBCOMM satellite data communications," said
Magellan President and CEO John Huyett.
Lowrance President and CEO Darrell Lowrance pointed
to the "synergies between the two organizations. Both
Lowrance Electronics and Magellan have pioneered
commercial applications of high technologies for
consumer markets. The combined Magellan-Lowrance
consumer products group represents a critical mass that
is well-positioned for growth and market expansion."
The acquisition will be accomplished through the
exchange of stock between the publicly traded
Lowrance Electronics and Orbital. Lowrance
shareholders will receive between 1,250,000 shares and
approximately 745,000 shares of Orbital common stock
with the actual number of Orbital shares issued to be
determined based on the market price of Orbital stock
prior to closing. Based on Orbital's Thursday, March 11,
1999, closing price, Lowrance shareholders would
receive approximately $24.1 million in value, or
approximately $6.41 per share of Lowrance common
stock. Closing is expected later this year. The transaction
will be accounted for using the purchase method of
accounting.
Pending regulatory approval, the transaction will result
in a stronger, more capable satellite access products
company employing more than 1,000 people in locations
throughout the world, including product development,
manufacturing and distribution centers in Santa Clara
and San Dimas, CA; Rochester Hills, MI; Tulsa, OK;
Ensenada, Mexico; Moscow, Russia; Sydney, Australia;
and Toronto, Canada.
The announcement of the Lowrance acquisition follows
other recent business news from Magellan including the
unveiling of a new $50 million joint venture between
Magellan and Hertz Corporation to deploy 50,000
Magellan-built vehicle navigation units in Hertz' car
rental fleet, and an agreement to partner with Topcon
Corporation to develop GPS-based precision products
for survey, GIS mapping and machine control.