China-based Deer Consumer Products Inc. is one of the world’s largest designers and OEM/ODM manufacturers of home and kitchen electronics, which it markets domestically and internationally. The company recently acquired the assets of a leading regional kitchen electronics manufacturer focused on Chinese domestic markets.
The two companies anticipate full integration by the second quarter of 2010, and the acquisition will be accretive to Deer’s 2010 earnings. The acquisition is expected to contribute about $20 million in sales and $2 million in net income for 2010.
Deer also recently raised its 2010 revenue guidance to about $155 million, up from previous guidance of $140 million, and is also raising its 2010 net income guidance to about $24 million from previous guidance of $22.5 million.
Bill He, chairman and CEO of Deer, said he believes the increase in China’s economic growth and global economic recovery will create a market his company is positioned to handle.
“Deer is in a strong financial and market position to continue to execute on our China domestic market expansion strategies. Deer management continues to focus on the efficient use of shareholders capital for earnings and accretive and synergistic transactions strategically that position Deer as a highly profitable, high growth ODM/OEM manufacturer and marketer of small kitchen electronics in the Chinese consumer marketplace,” he stated in the press release.
Deer’s growth strategy for increased global sales expansion is to focus on China’s domestic market through organic growth and accretive strategic acquisitions.
“China has the world’s fastest growing kitchen electronics market. Currently, not a single recognized global brand in the small kitchen electronics industry worldwide has any meaningful revenues and brand presence in the Chinese retail consumer marketplace. Faced with declining home market sales and lack of an executable China strategy, global consumer brands have failed to enter China successfully in the recent years,” He stated. “Deer has a direct access to the vast Chinese consumer markets in our industry. While we continue to focus on growing our business, Deer is in the process of weighing several strategic options globally that could potentially further enhance our shareholders value.”