Hornby Plc ("Hornby"), the models and collectibles group, has announced that it
has acquired the assets and ongoing business of its distributor in France. MKD,
a family owned company, is based outside Paris and is a well-known distributor
of model railway products and Scalextric throughout France. Founded in 1981, MKD
reported sales in 2004 of Euro3.8 million, producing earnings before interest and tax of Euro226,000.
Under the terms of the Sale and Purchase Agreement Hornby acquires the "Fonds de
Commerce" of MKD. Under this arrangement, frequently used in France, Hornby
acquires the fixed and intangible assets and retains existing employees of which
there are 11. Hornby does not assume responsibility for any of MKD's
liabilities. The consideration for the Fonds de Commerce is Euro750,000. The
inventory of MKD is subject to a separate valuation and purchase agreement for
an amount of approximately Euro750,000, subject to audit.
Frank Martin, Chief Executive of Hornby commented,
" The acquisition of the assets of MKD and the establishment of Hornby France is
a further vital strategic step in establishing a pan-European model railway and
slot racing business.
" MKD has been the Scalextric distributor in France since 1996 and the founders
of the business, Olivier and Martine Lanter have many years of experience in the
French model railway market. Both previously worked for Jouef in the 1980's.
" The Jouef brand, which we acquired with the Lima assets, enjoys a similar
level of awareness and affection amongst consumers in France as Hornby does in
the UK. In order to maximise the benefit from our plans to re-invigorate the
Jouef product line, following the relocation of the manufacturing activity to
China, it was important for us to control the distribution of Jouef in France.
Direct control of our distribution of Scalextric in France will also enable us
to attack the market more aggressively in the same way as we have in Spain this
year through Electrotren.
" We expect to be able to increase significantly the sales and profits in MKD
(Hornby France) as substantially higher sales volumes will be channelled through
the existing, fixed cost base."
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