Technology company Rakon is spending €400,000 ($NZ717,400) on a French-based competitor to help accelerate its growth in high performance products.
Rakon chief executive Brent Robinson said the acquisition would significantly accelerate Rakon's plans to develop markets for OCXO components - used for producing a very stable frequency - in space, aviation, under-sea telecommunications, mining exploration and defence.
"With Temex we gain penetration into some exciting applications, such as the Galileo navigation satellites and transportation vehicles for the International Space Station, as well as various aviation programmes," Mr Robinson said.
"The volumes in these may not be large in themselves but the value is very high and enables us to further develop cutting edge technology which can then be applied to higher volume markets."
The price was a significant discount to book value reflecting the need to invest time and new expertise to bring Temex up to Rakon's exacting technical standards, Mr Robinson said.
The purchase would be funded out of existing operating budgets.
Since buying its French operations in 2007, Rakon had moved high volume, lower margin telecommunications products to its low production cost joint venture in India.
The Temex acquisition accelerated Rakon's planned expansion in France into higher margin, very high performance applications, Mr Robinson said.
Based upon Temex's existing revenue of €11 million a year it was expected the aggregated business would begin to deliver modest returns in the near future and steadily grow over time as improvements were made.
