JVCKenwood agreed to acquire EF Johnson Technologies from its current owner, Francisco Partners. The value of the transaction was not disclosed.
The acquisition gives JVCKenwood a Project 25 (P25) infrastructure line and is integral to JVCKenwood’s overall strategic initiative to increase its focus on mission-critical communications, especially the U.S. public-safety market.
“This alliance brings key strengths together that will benefit our current and future public-safety customers,” said Haruo Kawahara, chairman and CEO of JVCKenwood. “We now have complete turnkey P25 infrastructure capability, mission-critical P25 radios with multiband capability and value-focused P25 radios for a wider range of customers. With this complete P25 product portfolio and our market-leading NEXEDGE digital radio technology, we are poised to significantly increase our global market share in professional wireless communications.”
EFJohnson will continue to operate as a wholly owned company headquartered in Irving, Texas, with its own brand. JVCKenwood will task EFJohnson to lead its overall corporate P25 initiatives, leveraging EFJohnson’s P25 expertise and focus on mission-critical-quality products.
“What we get is their scale,” said Andrew Adams, CEO of EFJohnson. “We’re now owned by a communications company, so our long-term strategy is aligned with theirs. We get their scale so it puts us on par with Motorola and Harris and competitors in the space.”
EFJohnson’s P25 infrastructure and high-tier full-featured P25 radios will combine with Kenwood USA Communications Sector’s lower-tier P25 radios for a full product portfolio that can better compete, said Karthik Rangarajan, EFJohnson vice president of marketing and product management.
The acquisition will also give EFJohnson access to JVCKenwood’s extensive North American and international dealer network. About 80 percent of EFJohnson’s sales are direct sales, said Adams. “What we bring from a leadership standpoint is expertise on the P25 infrastructure side, and then expertise on direct contact with customers, understanding the market and taking that information and dialing that into product roadmaps.”
Adams said EFJohnson’s 2013 overall sales were up 20 percent compared with 2012 sales, and several unsolicited potential buyers approached Francisco Partners. “We’re growing, and that’s what led to all the attraction,” he said. “We believe this will provide more choice for customers, which is better for the market.
EFJohnson has about 225 employees, and no staff reductions are planned, said Rangarajan.
The transaction is expected to be completed in the first quarter subject to regulatory approvals and customary closing conditions. Private equity firm Francisco Partners purchased EFJohnson in 2010. The company previously traded on the NASDAQ Stock Market.
Raymond James & Associates served as exclusive financial advisor to EFJohnson in connection with the transaction. EFJohnson celebrated 90 years in business last year.
JVCKenwood also owns Zetron, a console manufacturer that operates as a wholly owned company with its own brand. Earlier this month, JVCKenwood allied with Airbus Defence and Space (formerly Cassidian) to jointly evaluate common developments in public-safety wireless broadband technology for North America and Europe.
By Sandra Wendelken