RAPALA VMC CORPORATION STOCK EXCHANGE RELEASE
January 4, 2007
RAPALA CONTINUES IMPLEMENTING ITS STRATEGY FOR PROFITABLE GROWTH
Acquisition of Terminator lures
Rapala VMC Corporation ("Rapala") has entered into a conditional agreement to
acquire the fishing tackle business of Outdoor Innovations LLC and Horizon Lures
LP ("Terminator"), Oklahoma, USA based manufacturers and distributors of
Terminator branded spinner baits and other fishing lures. The deal includes
patents for the use of nickel titanium wire in fishing lures, trade marks,
customer lists, inventories, and some other assets. Completion of the transaction
is expected within a month. The consideration of the deal is made in cash.
Terminator spinners are known for their revolutionary nickel titanium wire, which
resists twisting and losing their shape. Therefore, they run accurately and true
right out of the package without additional tuning and adjustment. Terminator is
number 2 in the US spinner bait market with annual sales of some 2 MEUR.
Currently the Terminator lures are produced in a subcontract facility in Mexico
but the manufacturing will be transferred to Rapala's factory located in
Shenzhen, China within a short transition period. Rapala also plans to introduce
Terminator products to the global market through its worldwide distribution
network and use the nickel titanium wire also in some new products under
development.
Rapala and Shimano strengthen distribution alliance
Rapala and Shimano, one of the leading manufacturers of rods and reels worldwide,
have agreed to strengthen their distribution alliance. From the beginning of
2007, Rapala's Hungarian distribution company Rapala Eurohold Ltd in Budapest
will become a South East European distribution center. In addition to Rapala
products, it will distribute Shimano fishing tackle to Hungary, Rumania,
Bulgaria, Slovenia, Croatia, Bosnia, Serbia, Macedonia and Albania. Shimano sales
in South East Europe are expected to exceed 2 MEUR in 2007.
Already before, Rapala distributed Shimano rods and reels to South Africa and 12
countries in Europe. Shimano distributes Rapala products to 4 countries in
Europe.
New sales company in South Korea
Rapala will establish a fully owned sales company in South Korea to expand its
distribution network in Asia. This new unit will commence the distribution of
Group products in February 2007.
Acquisitions and investments in 2006
In January 2006, Rapala acquired the French fishing line supplier Tortue, and in
February 2006, the South African fishing tackle distributor Tatlow & Pledger,
which is used as a gateway to several African countries.
The total purchase price for the acquisitions closed in 2006 was some 6.4 MEUR.
In addition to this, the final payments in 2006 for the Luhr Jensen acquisition
closed in 2005 were some 2.8 MEUR. This was already capitalized in 2005.
The establishment of the new lure assembly factory in Russia announced in August
proceeds on plan. The premises are being prepared and refurnished and the
personnel are being hired. The operation will start in the beginning of February
2007.
RAPALA VMC CORPORATION
Jorma Kasslin
Chief Executive Officer
For further information:
Jouni Grönroos, Chief Financial Officer, tel. +358 9 7562 540
Olli Aho, Legal Counsel, tel. +358 9 7562 540
DISTRIBUTION
Helsinki Stock Exchange
Main Media
Rapala VMC Corporation is a leading fishing tackle company and the global market
leader in the fishing lures, treble hooks and fishing related knives and tools.
The Group also has a strong global position in other fishing categories. The
Group has its own distribution companies in all the main markets and the
largest distribution network in the industry. The main manufacturing facilities
are located in Finland, France, Ireland, Estonia and China. The Group brand
portfolio includes the leading brand in the industry, Rapala, and other global
brands like VMC, Storm, Blue Fox, Luhr Jensen, Williamson and Marttiini. The
Group, with net sales of EUR 196 million in 2005, employs some 4,000 people in 28
countries.