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Rakon Sells Non Strategic UK Asset

Rakon Sells Non Strategic UK Asset

16 May 2008: Auckland, New Zealand:

Rakon has announced it plans to sell the assets of Rakon's commodity business, based in Crewkerne UK to IQD Frequency Products Limited.

This business is largely involved in the sourcing and supply of mass market components, not manufactured by Rakon, to the European market.

Rakon Managing Director, Brent Robinson, said this was a logical step in Rakon's growth plans, and the business was quite different to Rakon's design and manufacturing operations.

"The Crewkerne business was included as part of our acquisition of the frequency control products division of C-Mac MicroTechnology in March 2007. Following this acquisition, we undertook a strategic review to determine what value the commodity trading business could add to the Rakon group."

"We determined that Rakon was better to focus its full resources on the substantial opportunities ahead by growing our enlarged manufacturing business. Similarly we concluded that the commodity business would be better served by owners and management focussing specifically on the needs and opportunities of that business."

The new IQD will maintain a very close working relationship with Rakon and both companies will continue to supply each other with components. Rakon's other European operations in Lincoln, Harlow and Argenteuil are unaffected by the sale.

"Apart from some local customers seeing a name change we don't expect there to be any impact on our existing customer base," explained Mr. Robinson. "We will still offer the same broad product range to our strategic customers that we always have and IQD will continue to supply Rakon products to their customers."

The new company will retain the existing management and staff of the current Crewkerne operation with the transfer expected to be concluded at the end of May 2008.

The proceeds from the sale will be equivalent to the value of the assets held. The business accounted for approximately 9% of Rakon's revenue and 3% of earnings in the 2008 financial year.

Rakon will release its Full Year 2008 results on the 22nd of May, accompanied by an update on operations.


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