New Medium Enterprises, developer of the HD VMD format, is to acquire Slovak consumer appliance manufacturer FKH Electronic for $11 million. It will be the first producer of HD VMD products in Europe.

NME expects this strategic acquisition to furnish it with a source of revenue of approximately US $30 million. FKH Electronic will bring to NME an assembly division for its HD VMD players and drives, guaranteeing fast and reliable delivery of products to both the European and overseas markets. In an important interim arrangement effective immediately, FKH Electronic will immediately open to NME its entire supply chain infrastructure, finance and management facilities in order to intensify the launch of its HD VMD products this quarter.

Mahesh Jayanarayan, CEO of NME Inc. says, "With the production, distribution and logistics expertise of FKH and the strong brand image, it is a perfect fit for our launch this year. This region is one of the fastest growing logistic hubs in Europe, attracting a number of major hi-tech brands like LG, Samsung, Philips and Sony. Slovakia is a booming economy, and a real window to the EU and international markets. As it's now part of the European Union, it can offer us attractive commercial advantages."

FKH Electronic A.S. is a leading producer and distributor of home appliances and consumer electronics devices in Central Europe, marketing its products under the brand name Orava. GFK Europe rated the Orava brand as having 18% market share in 2005 and ranked it number one in DVD player sales in Slovakia. It supplies more than one million units of various electronic products annually and has sold over 16 million TV sets to date.

FKH Electronic is currently selling Orava brand products in mega stores like Carrefour, Tesco, Metro, AHOLD, and in more than 1700 other retail outlets. With more then 270 employees worldwide, its Central European operation includes large warehousing facilities and a comprehensive fulfilment centre with global distribution capabilities.

Story filed 08.10.07