LONDON (AP) - Hornby PLC, a British-based manufacturer of model train and cars, said Friday that it has acquired Heico Modell, a privately owned distributor of model railway equipment in Germany.
In a statement to the Stock Exchange in London, Hornby said it paid a "nominal sum" for the business while also taking on liabilities of about euro200,000 ($250,000).
Heico, established in 1996, has more than 1,200 active customer accounts with independent retailers in Germany.
Frank Martin, Chief Executive of Hornby commented:
"The acquisition of Heico is a really important step in the development of our strategy to expand in Germany. The model railway market in Germany is the biggest in Europe and is estimated to be six times larger than the UK market. We believe that the market offers huge potential for growth as we launch new product into the market."
"We are pleased that the existing management team of Heico are staying with us. In turn they are excited by the prospect of working with our portfolio of brands, which we are working hard to re-invigorate since the acquisition of the Lima operations. In particular our brands Arnold and Rivarossi are well known in the German market."
"Our strategy to establish a global model railway and slot racing business is well advanced and this is a vital move that will enable us to grow in Germany. We are confident that we will be able to take advantage of the existing distribution network and increase significantly the volumes of product that we sell in Germany."
Its German acquisition will be renamed Hornby Deutschland GmbH and will also act as distributor for Hornby Group's Lima, Arnold and Rivarossi product lines. Heico's management team will remain in place, Hornby said.