Harris Technology Buys Drone Parts Supplier
Melbourne-based technology reseller Harris Technology has bought an American drone parts supplier hours after announcing it would exit joint ventures in Hong Kong and China.
The company said yesterday neither of the joint ventures were trading satisfactorily and the company incurred no “extraordinary expenses” in the exit.
Today the company announced an agreement to acquire Fstop Labs, an American-based company that produces and sells aftermarket parts and accessories for DJI drones.
Fstop Labs reportedly returned a US$1 million pre-tax profit in 2018, and its continued profit is a factor in the acquisition.
The terms of the deal dictate Harris Technology will pay a maximum of A$1.2 million in cash and $800,000 in shares if Fstop Labs meet its profit targets.
The profit target for the September 2019 quarter is $200,000 and increases by 5% for the following three quarters.
Harris Technology said it has sufficient cash to pay for the business, and given the transaction’s structure determines the cost of the acquisition is based on the profit of Fstop Labs, the purchase will largely pay for itself.
The company said the acquisition is part of manufacturer-to-consumer strategy, and it expects to use existing supplier relationships in China to expand Fstop Labs’ product range and the countries it operates in.