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Background
Odysseus is a medium sized firm, relatively new to international business in terms of how to operate outside of its local market where it has been successful by being able to build a niche with its coupling and clutch products.
Key Facts:
Product
• 8 products with 600 sizes and types – small batches of orders (not mass production)
• Patents across the globe
Sales
• Odysseus Flexible coupling product - 33% of sales revenue, total from $64M to $169M in 2007
• Largest customer only 4% of revenue – sales is highly spread out
• Export Sales @ $2.7M at a profit of 14.7%
International expansion
• Siren in UK
o 15 year license
o 1.5% royalty
o Broad geographic coverage rights plus non-exclusive outside UK
• Scylla, S.A. in France
o 10 year license
o 1.5% royalty
o Exclusive in France and non-exclusive in Belgium
• JV with Scylla, S.A
o Name change to SOSA
o 60/40 equity split with Odysseus funding the startup costs at $1.29M
o Market opportunity in France of $2.436M for L type coupling alone
• German Acquisition
o Halted due to existing long-term license with Siren for the geography
o Market opportunity in Germany of $29M for L type coupling alone
o Access to largest marketing Europe
Analysis
• Local production challenge ...