Nov. 17, 2010

TKH Group Acquires Optelecom

Dutch Technology company TKH and Optelecom have entered into a merger agreement for a subsidiary of TKH to acquire all of the outstanding shares of Optelecom-NKF in an all cash merger transaction for $2.45 per share. TKH Group is specialised in the development and delivery of systems and networks for the provision of information, telecommunication, electrotechnical engineering and industrial production. Optelecom-NKF is a leading global provider of advanced IP-video network systems.

Comments on the acquisition:

Alexander van der Lof, CEO of technology company TKH stated, "The strategic fit between TKH and Optelecom-NKF is excellent. Optelecom-NKF's portfolio is complementary to TKH's existing portfolio and strengthens TKH's position in the infra, transport and public transit market. Optelecom-NKF's customers get access to the broad portfolio of TKH's security solutions. With a strong focus on R&D at both companies, a further leading position in the security segment is aimed for. The internationally focused sales activities of Optelecom-NKF are in line with TKH's objective to increase the turnover generated by the security solutions to 20% of the total turnover."

According to Dave Patterson, president and CEO of Optelecom-NKF, "The knowledge components and techniques of TKH companies are combined to create innovative solutions to customer needs.  As a member of TKH, this approach will enable Optelecom-NKF to provide complete security solutions to our customers, increasing the value we can add through our strong network of relationships.  In a time of increasing consolidation within the global security industry, this transaction with TKH represents value for our shareholders and a good strategic fit for Optelecom-NKF."

The Board of Directors of Optelecom-NKF has unanimously approved the merger agreement and recommends that Optelecom-NKF's shareholders vote in favor of the transaction. The transaction, which is expected to close in the first quarter of 2011, is subject to the approval of Optelecom-NKF's stockholders and other customary closing conditions. Additionally, Optelecom-NKF and Draka Holding N.V.

("Draka") have agreed to a 30% reduction in the principal amount payable by Optelecom-NKF to Draka under the promissory note entered into in connection with Optelecom-NKF's acquisition of NKF Electronics B.V. from Draka in 2005. 

Optelecom reported net loss for Q3

On Monday Optelecom announced their third quarter 2010 results. Revenues for the third quarter totaled $7.6 million compared to $8.3 million for the same quarter one year earlier.  Revenues declined sequentially from $7.7 million reported in the second quarter this year. The Company reported a net loss of $929 thousand or $(0.25) per share, for the quarter ending September 2010, compared to net loss of $1.3 million, or $(0.35) per share, one year earlier.  The Company's operating loss declined to $53 thousand compared to a loss of $958 thousand one year earlier. Adjusted EBITDA for the quarter was $244 thousand compared to a loss of $553 thousand for the same quarter last year.


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