Codan Buys Daniels for $25M (8/7/12)
Australia’s Codan announced the acquisition of Daniels Electronics, a Canadian manufacturer and supplier of two-way radio communications equipment.
The acquisition, scheduled for completion Aug. 17, comprises an upfront cash payment of CAD$25 million (US$25.1 million) with the possibility of about CAD$2 million (US$2 million) in additional payments if certain earn-out targets are achieved during the next 18 months. The funding for the transaction will be through a mix of debt and equity.
The acquisition of Daniels delivers on Codan’s stated strategy of increasing market share and diversifying its radio communications product offering. Codan manufactures a range of electronic products, with three key business divisions: radio communications, metal detection and mining technology. Daniels manufactures Project 25 (P25) equipment for public-safety and other mission-critical markets.
Daniels will be a wholly owned subsidiary of Codan and continue to operate from its Victoria, British Columbia, office. The firm's 73 employees will all be retained, said Daniels Electronics President and Chief Operating Officer (COO) Robert Small.
“The acquisition of Daniels begins a transition for Codan beyond solely HF systems to a communications solutions provider. Daniels provided the opportunity to enter the LMR market with a competitive and established product line,” said Kevin Kane, president and general manager, Codan radio communications division.
Daniels clients include fire services organizations, police and ambulance, as well as military, forestry organizations, highways and road contractors, and mining and exploration companies. Daniels has an extensive distribution network and a public and private client base, predominantly located in Canada and the United States.
Small said he expects the deal will provide more products for Daniels' customers, in addition to more product support and integration and research and development. About 70 percent of Daniels' business is in the United States, and 25 percent is in Canada, Small said.
“Originally a family owned business, Daniels is very happy to be acquired by an Australian company that shares a similar history and culture and that will continue to grow the opportunities for our LMR products,” said Small
The deal provides Codan with an established North American market and the opportunity to bring Daniels’ product offerings to Codan’s global distribution networks, especially in the emerging world. “LMR is an outstanding complement to Codan’s existing product line, distribution network and customer base,” Kane said. “Daniels’ value proposition of interoperability and low-power consumption technology is ideal for emerging international markets.”
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