Garmin in acquisition mode. Sirf a target?

xenophon · Occasional Visitor Joined: May 11, 2005 Posts: 18

I wonder if Sirf is who they'll target first....

http://www.kansascity.com/mld/kansascity/business/technology/12777800.htm

Garmin moves to shopping mode

By DAVID HAYES

The Kansas City Star

“I feel sometimes we’ve been too cautious. Going forward we’ll be more aggressive.”

Garmin CEO Min Kao

Garmin Ltd., which has made only two corporate acquisitions during its 16-year history, is going shopping.

Min Kao, Garmin’s chief executive, said the Olathe company will look for strategic acquisitions as it competes in the fast-growing GPS market.

That news, and a flurry of deals announced Wednesday and Thursday, sent Garmin’s stock up sharply. Shares jumped more than 7 percent Thursday, closing at $66.68, up $4.50.

Garmin has been cautious about acquisitions in the past, purchasing only a United Parcel Service aviation subsidiary in 2003 and the assets of a California aviation electronics firm in 2001.

Both acquisitions worked out well for Garmin, Kao said.

“I feel sometimes we’ve been too cautious,” Kao told Wall Street analysts Thursday. “Going forward, we’ll be more aggressive.”

Kao made the statement as Garmin executives met with financial analysts in town to hear about the company’s product line and finances, and tour its new $60 million headquarters expansion.

Trading in Garmin shares was level throughout the morning but jumped minutes after the meeting ended.

Garmin has more than $630 million in cash on hand, no debt and free cash flow that increases yearly. Some analysts and investors have questioned the company’s cautious strategy.

Kevin Rauckman, Garmin’s chief finance officer, said the company will look only for acquisitions that “easily fit into our business.”

With sales close to $1 billion this year, Garmin will be looking for smaller acquisitions, Rauckman said.

“You shouldn’t look at us to buy a $1 billion business,” he said.

Rauckman reiterated the company’s financial guidance. The company has projected earnings per share of $2.43 to $2.48 for the year, on sales of $950 million to $975 million.

Garmin may offer updated guidance when it releases its third-quarter sales results in October, Rauckman said.

The company also demonstrated some of the 60 new recreation, automotive and aviation global positioning system devices it plans to introduce in 2005.

This week, Garmin announced deals to provide navigation devices to Thrifty and Dollar car rental outlets, with Honda to sell GPS units that will be standard on some Gold Wing motorcycles. Garmin also said its digital autopilot system has been certified by the Federal Aviation Administration.

The autopilot and Garmin’s digital cockpit will be used by Raytheon Aircraft in its Beechcraft Bonanza G36 single-engine planes.

--------------------------------------------------------------------------------
To reach David Hayes, senior technology writer, call (816) 234-4904 or send e-mail to dhayes@kcstar.com .

	PocketGPS
	Web