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Sale of one of europe's largest manufacturers of equipment for receiving and distributing television and satellite signals

Operating enterprise

Sale of 90% stake in the company.

Sold

Price: 2 300 000 €
Klatovy Region:
Country: Czech republic
  • Location of the company: Czech Republic, Klatovy, Plzeň Region – founded in 1260, 23 thousand inhabitants. 130 km from Prague mainly along the D5 motorway Prague – Germany. To the border with Germany – 50 km
  • Sales: Germany, Poland, France, Spain, Great Britain, Holland, Egypt, Saudi Arabia, Kuwait, UAE, Brazil, USA, Canada, etc. In total more than 30 countries
  • Activity: development, production and sale of equipment for reception and distribution of television and satellite signals.
  • Main products: multiswitches, cascade multiswitches, Unicable, DiSEqC switches, amplifiers, adders, etc.
  • Product quality: excellent European quality

Characteristics of the company for sale

EMP (Limited Liability Company), was founded in 1995, and since 2003 has been certified according to ISO 9001 standards.

For more than 18 years, EMP – Centauri has been developing and manufacturing equipment for receiving and distributing television and satellite signals: multiswitches, cascade multiswitches, Unicable, DiSEqC switches, amplifiers, adders, etc.

Product Features

A significant part of the development and production of the company's equipment to a certain extent serves as a replacement for cable and terrestrial television.

With the help of products, TV signals from a satellite dish, as well as signals from terrestrial antennas and Internet signals, are distributed for each user separately both in a small residential building and in a large hotel complex and at the same time each user can monitor hundreds and thousands of radio and television programs, as well as receive the Internet.

Compared to cable TV, these signal transmission solutions have such advantages as a very small initial investment in the purchase and at the same time eliminate the costs associated with laying long cables and wiring, as well as regular monthly payments to the cable TV provider.

Another great advantage of the products is the quality of signal reception, which when using these solutions no longer depends on the density of construction or the complexity of the surrounding landscape, and therefore, it is possible to obtain a high-quality signal even in areas where the quality of terrestrial signal reception is difficult to obtain.

History

From the first stage of creation, the Company was focused on foreign markets, where there was an increased demand for its products. Currently, 95% of the manufacturer's products are exported to many countries of the world: Germany, Poland, France, Spain, Great Britain, Holland, Egypt, Saudi Arabia, Kuwait, UAE, Brazil, USA, Canada, etc.

The Company's products have a four-year warranty and excellent quality for a very reasonable price.

Due to its favorable geographical location in the center of Europe, the proximity of German borders and the promising direction of production, the company in 1996 found a major customer in Germany, which later became a 10% shareholder of the company.

For many years, the Company's products have had great success and constant growth in demand in Europe and North America, and with considerable success have been presented at international exhibitions in London, Istanbul, Dubai, Singapore, Las Vegas, Atlanta, Cologne and other exhibitions, where partnerships with a number of international distributors have been established.

For the first 5 years, the company rented premises, but since 2000 it has been producing on its own premises – in a building that was built on credit funds of Czech commercial banks.

Initially, the building, with an area of more than 1000 m2, housed the company's production facilities, design development bureaus, office and warehouse premises.

Until the last decade, the company was actively developing with an annual increase in turnover and profit:

  • In 2002, the company recorded a net profit after tax of 300,000 euros.
  • In 2003, the company achieved a net profit of more than 600,000 euros.
  • In 2004, the company made a net profit of more than 800,000 euros

In 2004, the company's turnover was about 5 million euros.

After ten years of successful work, when the company already employed 120 people and it steadily began to make a profit, the existing production facilities were not enough to fulfill all incoming orders.

Responding to the increased demand and the shortage of space, the Company's management decided to expand production and invested in the construction of another new building.

At the beginning of 2005, the company received a new loan from CB Bank in the amount of 20 million kroons and 670,000 euros. Existing real estate was pledged to the bank, as well as real estate that was supposed to be built.

Taking into account the construction started and loans, the company's net profit in 2005 decreased to 300,000 euros.

In total, 1.5 million euros of credit funds and 400,000 euros of own funds were invested in the construction of the new building and production. Construction was completed in 2006.

Today, the total area of the company's real estate is 2401 m2, and the land plots are 2744 m2.

In 2013, a licensed expert appraiser estimated the company's real estate in the amount of 4,250,000 euros.

During 2006 and 2007 EMP – Centauri was also purchased new modern equipment.

Crisis period 2006 – 2009

In the period from 2006 to 2009, the company found itself in a crisis, the main causes of which were the following factors:

  • Strengthening of the kroon exchange rate from 30.5 kroons for 1 euro to 27 kroons. In view of this, the company's annual losses in the export of products amounted to 7,000,000 CZK.
  • The ongoing construction in the process of which the company's management was forced to engage in construction and, to a much lesser extent, production
  • The departure of many customers and manufacturers to the Chinese market, especially with the onset of the global economic crisis
  • The deterioration of the political situation in Turkey, as a result of which the Turkish distributor stopped buying products in annual volumes of 500,000 euros

During the crisis period, the company worked with annual losses of about 250 -350,000 euros per year.

Post-crisis period and present tense

During 2009 and in 2010, a turning point was made in the strategy of European and North American customers, who were convinced that Chinese products are very unreliable, have poor technical parameters, in many cases do not have a warranty period, and also that low quality does not compensate for the low prices of Chinese products.

Currently, the company is the only manufacturer of this product line in the Czech Republic and one of the few European manufacturers. In Europe, several companies produce similar products, but despite the European address, in fact they are engaged in production in China, and as a result of this, they are gradually losing customers and their positions in the European market.

Brand

For 20 years of active work, the company has created an excellent image in the international market, and its products under the brand have become a recognizable brand.

The trademark is currently synonymous with high European quality and very good price of products.
Competitive advantages

In the last two years, it has become obvious that having survived the period of the European crisis associated with the purchase of products by customers in the Chinese market, today's production of EMP-Centauri with the label "Made in EU" is causing more and more well-deserved consumer confidence, which contributes to a stable recovery in demand from customers, many of whom have returned to the Company.

Competitive advantages are also:

  • Solutions and developments are more cost-effective than solutions from other manufacturers
  • Excellent engineers – developers and designers
  • Short production time, especially in comparison with China
  • 4 years warranty and unlimited customer service
  • Unlike competitors, the products have the ability to switch the active and passive input of the TV
  • The products fully comply with European standards for electromagnetic compatibility and safety

Location

Due to its strategic location in the center of Europe, the company is able to quickly respond to customer requests at the lowest price of transportation costs.

The city of Klatovy, Plzeň region – founded in 1260, 23 thousand inhabitants. 130 km from Prague mainly along the D5 motorway Prague – Germany. To the border with Germany – 50 km

The great competitive advantage of EMP – Centauri is its own advanced design department of research and development. This fundamental advantage is very positively assessed by customers, since most other manufacturers do not have such departments, and as a result of this, they cannot offer innovative solutions and the latest products on the market.

This trend was especially confirmed by the international exhibition ANGA Cable – 2013 in Cologne, Germany, where EMP-Centauri successfully introduced new products of the latest generation.

Product Sales

Currently, the company supplies its products to 30 countries around the world, and also has a target assortment that sells through an electronic store on the Internet.

In some countries, the company, with the help of its sales representatives, has created distribution networks through which it supplies products to a large number of wholesale companies and stores.

Due to the stabilization of demand trends for high-quality goods of this type, the company EMP – Centauri for the first time in recent years began to raise the price of its products, thereby increasing its profitability.

Interest in the products was confirmed by the ANGA Cable exhibition at which several companies showed a desire to become distributors in their countries: England, Holland, Belgium, Turkey and even China. In addition, interest was shown by new companies from countries in which EMP – Centauri already has its exclusive distributors.

Currently, 60% of customers are regular, with whom the Company has been working for 8-10 years or more.

The economic situation of the company at present

The crisis of 2006-2009, when the owners of the company, despite losses, had to pay the bank's loan, had a negative impact primarily on today's cash flow of the company. After overcoming the crisis and bringing the company to a profitable mode, the financial reserves of the owners were completely exhausted.

Currently, with a stable portfolio of orders, the company is experiencing an acute shortage of funds for the purchase of materials, components and raw materials for their implementation. The servicing bank, which provided a loan in 2006 for the expansion and construction of buildings, refuses to provide a new loan due to the fact that during the most acute period of the crisis the company was several times unable to make a regular payment to pay the loan and fell into the category of high-risk customers.

First of all, the chronic shortage of working capital over the past three years has served as an impetus to find a strategic investor who is able to buy 90% of the company's shares and give it a new impetus to further development. At the same time, the current owners of the enterprise plan that some debts will be repaid from the amount received for the sale of the company, cash flow will improve and the company will be able to fully accept and fulfill existing and future orders.

Owners who are also directors of the company hope that the new owner will use their knowledge, experience and they will be able to continue working as managers.

Assets

Total assets: more than 4 000 000 euros

  • Real estate by accounting: 2 200 000 euros. On September 18, 2013, the company received an assessment of its real estate conducted by a licensed expert – appraiser in the amount of 4,250,000 euros.
  • Equipment: 1 200 000 euros
  • Accounts receivable: €100,000 (unexpired)
  • Warehouse: 260 000 euros

Liabilities

Total liabilities: €2,300,000

  • Equity: 700 000 euros
  • Bank loan balance: EUR 1 050 000
  • Liabilities: €550,000

Development prospects

The company's management is confident that in the 21st century – the time of electronics and satellite communication, the company will be provided with orders for many decades. According to experts, the crisis associated with the competition of Chinese products of this type is in the past.

For all the time of its existence, the company was fully focused on Western markets and did not supply its products to the CIS markets. More active activity of new owners in the huge markets of Russia and the countries of the former USSR can significantly increase the company's sales.

Based on the experience gained, especially during the crisis period, the company's management sees prospects in the partial re-profiling of production for the production of electrostatic motors, as well as in developments related to the production of electricity using the concentration of solar energy. In this area, the company has already started cooperation with the Israeli company OR HAMA ENERGY Ltd.

The format of the transaction and the activities of the enterprise after the change of ownership

The subject of the sale is 90% of the shares in the limited liability partnership (s.r.o.)

Price: 2 300 000 euros

From this price, part of the funds will go to repay the company's obligations in accordance with the agreement of the parties.

The top management of the company is ready to continue its work after the change of ownership.

According to the estimates of the current owners and management of the enterprise, a possible change of ownership will not adversely affect the mood of engineering and technical specialists and the number of employees of the enterprise.

The purity of the transaction, the absence of hidden financial and legal obligations is guaranteed by the personal responsibility of the owners, the process of gradual transfer of management in accordance with the agreement, legal mechanisms and norms provided for in the Czech Republic

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