2 April 2021

Codan Limited (ASX: “CDA”) has entered into an agreement to acquire 100% of the shares in US-based company, Zetron, Inc. (Zetron), from JVCKENWOOD Corporation. Established 40 years ago, Zetron is a leading US based company providing mission critical communications and interoperability solutions for public safety, transportation, utilities, healthcare and natural resources customers. Zetron operates from locations in the US, Australia and the UK, with more than 200 employees.

The acquisition comprises an upfront cash payment of USD45 million (approximately AUD59 million), which will be funded through a combination of existing cash and a recently approved banking facility of AUD100 million. The acquisition is on a cash free, debt free basis and is expected to complete by 30 April 2021, subject to obtaining change of control consents and other conditions precedent standard for transactions of this nature.

Zetron is expected to contribute approximately AUD67 million of sales and AUD8 million in EBITDA under Codan’s ownership in FY22 and therefore it will be earnings-per-share accretive.

Chief Executive, Donald McGurk, said “The acquisition of Zetron is in line with Codan’s well publicised strategy to transform our Communications businesses from products to solutions. This acquisition allows us to capitalise on Zetron’s extensive distribution network, brand strength and customer loyalty.”

Zetron offers a suite of integrated emergency response technologies which are complementary to Codan’s existing products. These include voice dispatch, emergency call taking including Next Generation 911 (NG911), mapping, computer aided dispatch and fire station alerting. An infrastructure bill which includes USD15 Billion in NG911 funding is currently under consideration by the US Government. If passed, this will enhance emergency number services to allow voice, photos, videos and text messages to flow seamlessly from the public to the 911 network.

Zetron has an exceptionally strong brand in North America with an extensive network of more than 300 distribution partners and has made sales into more than 100 countries. Zetron will add to Codan’s existing North American presence, growing our current employee base from 140 to 320 as a result of this acquisition. Codan will merge our Critical Communications and Zetron businesses to create a single mission critical communications company trading under the stronger Zetron brand.

"ZETRON AND CODAN HAVE A PROUD HISTORY OF PROVIDING MISSION CRITICAL COMMUNICATIONS AND THE COMBINATION OF THE TWO COMPANIES WILL ENABLE US TO BETTER MEET OUR CUSTOMERS DEMAND FOR INTEGRATED SOLUTIONS. BY COMBINING CODAN’S LAND MOBILE RADIO PRODUCTS AND SOLUTIONS WITH ZETRON’S COMMAND & CONTROL CAPABILITY, WE WILL BE IN A POSITION TO BETTER SERVE THE GROWING NG911 MARKET, WHILST MAXIMISING VALUE AND CHOICE FOR OUR CUSTOMERS."

--Codan’s President for Critical Communications, Scott French

Codan’s philosophy of funding R&D projects to create unique market leading IP will apply to this acquisition and to the other recently announced acquisition of Domo Tactical Communications. Over time we expect to increase R&D funding in order to achieve a market leading position across both businesses.

Codan looks forward to working with Zetron staff to effect a seamless integration and transition into the Codan group.

16 February 2021

Codan Limited (ASX: “CDA”) has entered into an agreement to acquire 100% of the shares in US-based company, Domo Tactical Communications (DTC), from a Private Equity company. DTC is an established technology provider for high bandwidth wireless communications with specialist capabilities in MIMO Mesh networks (next generation software defined networks where multiple antennas stream data to and from devices across a network that is self-forming and self-healing). DTC is a trusted and long term supplier into more than 20 key United States government agencies as well as the “Five Eyes” intelligence communities.

DTC’s MIMO Mesh products provide wireless transmission of video and other data applications to predominantly first world customers, including Military and Special Forces, Intelligence Agencies, Border Control, First Responders and Broadcasters. DTC is headquartered in the US, with locations in the UK and Denmark and has around 140 employees.

The acquisition is expected to complete by 30 April 2021, subject to a number of US and UK regulatory conditions typical for transactions of this nature.

Chief Executive, Donald McGurk, said “The acquisition of DTC is consistent with Codan’s well publicised strategic growth plan for our Tactical Communications business. This is focussed on providing total communications solutions by transitioning from a traditional voice only platform via the addition of data and video communication capabilities. This acquisition fills a technology gap and will be able to leverage Codan’s global distribution channels into the developing world. Importantly this transaction will be accretive for Codan shareholders from the outset.

Codan has been successfully doing business in North America for over 20 years and this acquisition represents a continuation of our growth in this strategically important region. Total employee numbers in North America will grow from 120 to 140 as a result of this acquisition, with the majority focussed on product development and software engineering.

DTC’s products are complementary to Codan’s Tactical Communications solutions and serve similar markets and customers. A number of key members of our Tactical Communications sales team have previously worked in the MIMO Mesh and surveillance markets, and therefore have significant experience in this industry segment”.

"DTC IS AN IMPORTANT STRATEGIC ACQUISITION FOR US AND BRINGS COMPLEMENTARY CAPABILITIES TO OUR EXISTING TACTICAL COMMUNICATIONS SOLUTIONS. WE WILL BE ABLE TO ADD IMMEDIATE VALUE BY INTEGRATING DTC’S AND CODAN’S SALES AND MARKETING TEAMS AS WE OPEN UP NEW GEOGRAPHIC ROUTES TO MARKET. OVER THE LONG TERM OUR COMBINED ENGINEERING CAPABILITIES WILL ALLOW US TO BRING UNIQUE COMMUNICATIONS SOLUTIONS TO A DIVERSE GLOBAL CUSTOMER BASE FROM MILITARY TO SECURITY TO BROADCASTING."

--Codan’s President for Tactical Communications, Paul Sangster

Codan looks forward to working with all DTC staff to affect a seamless integration into the Codan group. DTC is well known to Codan and we believe that there is excellent cultural alignment.