Royal Oak Acquisition to Transform Autoco.com into a Consumer Electronics Industry Powerhouse
17 August 1999
Royal Oak Acquisition to Transform Autoco.com into a Consumer Electronics Industry Powerhouse
MINNEAPOLIS--Aug. 17, 1999--Autoco.com Inc. (OTC BB:AOOO) announced today the reasons behind its Royal Oak Technologies Inc. acquisition, which was successfully closed last week. The acquisition will make Autoco.com a significant player in Canada's consumer electronics industry; while at the same time providing tremendous synergies for Autoco.com's other business.Royal Oak is manufacturers' representative for many big name brands, such as Jensen Car Audio, Koss speakers, Orion Car Audio, the unique First Smart Sensor home security system, and Polaroid Batteries and accessories. Royal Oak's marketing performance track record is impeccable. It took AST computers from $800,000 in annual retail sales to over $100 million a year by 1997. That made AST the number one selling retail computer line in Canada for over 36 months (source: International Data Corporation), increasing its market share from 0.5% to 16%.
"The acquisition will make Autoco.com a major player in the auto and home electronics industry almost overnight. However, the real value of this transaction is in the synergies that the acquisition provides. All of our business units will now have access to Royal Oak's proven marketing expertise. We believe this will significantly increase Autoco.com's sales and profitability, as well as enhance our earnings and cash flow," says Max J. Wandinger, chairman and vice president of business development at Autoco.com.
"For example, our Internet-based Motor Pages service will target both car buyers and dealers. Royal Oak may find that Motor Pages can develop into a great new avenue to promote and sell the products it represents, both to dealerships and retail customers," describes Wandinger.
Motor Pages is due to be launched within the next few weeks. It will allow potential automobile buyers to research, evaluate and simplify the very stressful process of purchasing new or pre-owned vehicles. Autoco.com's goal is for Motor Pages to reach at least a 10% market share among 45,000 dealerships in Toronto, Chicago, Cleveland, Detroit and Buffalo. It plans to accomplish this by providing several value-added services to the dealerships in addition to the search services it will provide for individual car buyers. These additional services will likely include dealer-to-dealer networking, which will enable small automobile dealers to have access to the inventories of hundreds or even thousands of other dealers, as well as real-time online inventory management and other Internet related services.
"Our Internet expertise will also enable us to enhance Royal Oak's operations by helping it to market its products effectively over the Internet. We should be able to announce our plans on this front within the next 8-12 weeks," estimates Wandinger.
Autoco.com's third operating division, GTA Auctions and Liquidations Inc. should also benefit from the acquisition. GTA, which is the largest public automobile and liquidations auction in Ontario, will have direct access to Royal Oak's marketing expertise, thus enabling it to grow more rapidly and diversify into other markets as well.
Certain statements in this release are forward-looking. Although Autoco.com (the Company) believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Autoco.com believes that its primary risk factors include, but are not limited to: the need for substantial financial requirements; the need to develop effective internal processes and systems; the ability to attract and retain high-quality employees; changes in the overall economy; changes in technology; the number and size of competitors in its markets; changes in the law and regulatory policy; and the mix of product and services offered in the company's target markets. Merger Communications (Merger) is a media relations firm employed by the Company. Statements and opinions presented here represent the views of the Company, not Merger, as the release is based on information provided by the Company. Merger and the Company believe that all information in this release has been obtained from sources considered reliable, but cannot guarantee that the statements presented herein are accurate or complete. Merger's compensation for its media relations services consists of a fee and stock. Merger and its employees can have a position in the securities of the companies in which it distributes information for media use, and may be buying or selling securities in the course of its regular business.