From the Hornby Plc Website
Story Posted: 05/10/2004
Hornby Plc, the model and collectables group, is pleased to announce that the Court of Brescia in Italy has signed a decree which allows the Liquidators of Lima S.p.a. to accept Hornby's offer of ?8 million to acquire certain assets of Lima.
The Hornby Board is confident that the acquisition will be completed by the end of the calendar year.
Lima is one of the best-known model railway companies in Europe.
However, given the high cost overhead associated with its European based manufacturing operations, the company has suffered recently from poor cash flow and was forced into liquidation in 2003.
The Hornby Board is confident that it has the skills and experience to re-invigorate Lima?s brands. This will be achieved by reducing production costs by outsourcing production to China and concentrating on improving sales and distribution channels to ensure a recovery in sales of Lima?s key European markets. Hornby intends to maintain Lima?s current product lines.
The bulk of the company?s assets are detailed product moulds; initially these will be moved to Hornby?s site in Margate before dispatch to China. Hornby has implemented this outsourcing strategy successfully with its own Hornby and Scalextric brands.
The acquisition represents a major opportunity for Hornby to continue its growth in key European markets. Lima has a strong range of brands:
Lima/Rivarossi - brand leaders in Italy Jouef - brand leader in France Arnold - 'N' gauge products (predominantly German) Pocher - high-end diecast collectable kits
In addition to the European opportunity, Rivarossi is recognised as a premium brand in the USA.
Chief Executive of Hornby, Frank Martin, said: "We are delighted that the Italian Court has recognised the merits of our offer. Now, subject to our due diligence, we hope to complete the acquisition before the end of the year. We are excited by the potential for the Lima brands, which alongside our Spanish operation Electrotren, will form the platform for our expansion into key European markets. Over the long-term we are confident that this will also increase our rate of growth in the USA.?