New Medium Enterprises (NME) acquired FKH Electronic A.S. with headquarters in Slovakia for US$ 11 million.
NME, the company behind the HD VMD high-def optical disc format, said that the acquisition is expected to offer a real window to the EU and international markets.
"With the production, distribution and logistics expertise of FKH and the strong brand image, it is a perfect fit for our launch this year. This region is one of the fastest growing logistic hubs in Europe, attracting a number of major hi-tech brands like LG, Samsung, Philips and Sony. Slovakia is a booming economy, and a real window to the EU and international markets. As it's now part of the European Union, it can offer us attractive commercial advantages," said Mahesh Jayanarayan, CEO of NME Inc.
FKH Electronic A.S. is a producer and distributor of home appliances and consumer electronics devices in Central Europe, marketing its products under the brand name Orava. GFK Europe rated the Orava brand as having 18% market share in 2005 and ranked it number one in DVD player sales in Slovakia. It supplies more than one million units of various electronic products annually and has sold over 16 million TV sets to date. Since its inception, FKH Electronic has proven to be profitable and in the last 3 years has posted an annual turnover in excess of US $25 million.
FKH Electronic is currently selling Orava brand products in mega stores like Carrefour, Tesco, Metro, AHOLD, and in more than 1700 other retail outlets. With more then 270 employees worldwide, its Central European operation includes large warehousing facilities and global distribution capabilities.
NME expects this strategic acquisition to furnish it with a source of revenue of approximately US $30 million. FKH Electronic will bring to NME an assembly division for its HD VMD players and drives, offering fast delivery of products to both the European and overseas markets. In an important interim arrangement effective immediately, FKH Electronic will immediately open to NME its entire supply chain infrastructure, finance and management facilities in order to intensify the launch of its HD VMD products this quarter.