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Garmin Ltd. (GRMN - Analyst Report), a worldwide provider of satellite navigation, communications and information devices announced the acquisition of Swedish company Nexus Marine AB for an undisclosed sum.

Nexus specializes in designing, manufacturing and distribution of navigation instruments for racing and cruising yachts. The company has a diverse product portfolio, which comprises sailboat, powerboat, sailing instrumentation systems and other related peripherals for the sailing arena.

The acquisition makes perfect sense, as Nexus Marine’s expertise in the sailing space will complement Garmin’s years of experience in navigation systems for the marine segment. Garmin will largely benefit from Nexus’ skills for designing instruments that are used in the marine industry.

According to global market research and management consulting firm Lucintel, the global recreational boat market is expected to grow at compounded annual growth rate (CAGR) of 8.5% and may reach $30.63 billion in 2017.

Garmin is aggressively adding to its marine product portfolio. In the last few quarters, Garmin launched GDL TM 40 cellular marine weather receiver, the GHS TM 20 and 20i wireless remote handsets for Garmin’s VHF 200 and 300 series marine radios and an updated version of the GHP TM 12 marine autopilot.

Garmin continues to invest heavily in the development of products across all segments. Garmin’s research expense in 2011 increased 25.0% year on year to $29.7 million.

Garmin is also looking for strategic acquisitions that could complement and build on its current portfolio of products. It is also increasingly marketing its products through OEMs, which will gradually increase the stability of its revenue stream.

Garmin’s second-quarter revenue of $718.2 million was up 29.0% sequentially and 6.5% year over year, helped by particular strength in the outdoor segment, which increased double-digits from both periods. The Marine segment was up 20.9% sequentially, while declining 14.3% from the year-ago quarter and contributed 9.5% to total revenue. The decline from the year-ago quarter was on account of weakness at both OEMs and in the after-market, which Garmin said was because of the shrinking of the global marine electronics market.

Currently, Garmin Ltd. has a Zacks #2 Rank, implying a short-term ‘Buy’ rating.

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