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Technology company Rakon has sold the assets of its British-based commodity business.
The sale of the Crewkerne-based business, which sources and supplies non-Rakon manufactured mass-market components to the European market, is valued at around $4 million.
The company said the sale was at book value and would have minimal impact on Rakon's earnings per share, accounting for about 9 per cent of Rakon's revenue and 3 per cent of earnings in this financial year.
Auckland-based Rakon designs and manufactures high-performance crystals and oscillators used in global positioning systems products.
Managing director Brent Robinson said this was a logical step in the company's growth plans, and the business was quite different to Rakon's design and manufacturing operations.
The Crewkerne business was part of C-Mac MicroTechnology's frequency control products division which Rakon acquired in March last year.
"Following this acquisition, we undertook a strategic review to determine what value the commodity trading business could add to the Rakon group," Robinson said.
"We determined that Rakon was better to focus its full resources on the substantial opportunities ahead by growing our enlarged manufacturing business. Similarly we concluded that the commodity business would be better served by owners and management focusing specifically on the needs and opportunities of that business." The buyer, IQD Frequency, will keep a close working relationship with Rakon and both companies will continue to supply each other with components.
Rakon's other European operations in Lincoln, Harlow and Argenteuil are unaffected. "Apart from some local customers seeing a name change, we don't expect there to be any impact on our existing customer base."
Existing management and staff at Crewkerne will be retained, with the transfer expected to be concluded at the month's end. Last August Rakon restated its commitment to New Zealand manufacturing as it made plans for a new factory in China.
The company employs about 750 people globally with about 500 employees at its Auckland head office.
Rakon releases its full year results next Thursday. Shares in the company rose 4c to close at $3.45.
They have ranged between $5.80 and $2.05 in what has been a rollercoaster of a market ride for the company in the past 12 months.
