Siward Crystal Technology Company will invest $US10 million ($NZ14.4 million) in the NZX-listed Rakon, which Rakon managing director Brent Robinson said was a game-changer for both companies.
Siward, which is listed on the Taiwan Stock Exchange, will buy 38 million new fully paid Rakon shares at 37c, well above Monday's closing price of 17.2c.
Rakon's shares have taken a beating since they were the market darling. They reached a high of $5.80 and a recent low of 17c. After the announcement, they reached 28c before settling at 24c.
Craigs Investment Partners broker Chris Timms said Siward saw value in Rakon and the $US10 million was probably ''small beer'' but a good strategy.
Rakon was a global high-technology company and a world leader in its field. It designed and manufactured advanced frequency control and timing solutions for telecommunications, global positioning and space and defence applications.
The deal allowed Rakon to reduce debt and take pressure off its balance sheet, he said.
In the six months ended September, Rakon reported an operating loss of $4.2 million, a reversal of the $1.2 million profit reported in the previous corresponding period.
''Rakon has gone from the darling to the doghouse since 2007,'' Mr Timms said.
Mr Robinson said the new investment allowed Rakon to establish a strategic partnership with a well-established and successful crystal manufacturer.
''This partnership will give both companies a broader range of products and alternative channels into new and existing markets.''
Siward's efficient manufacturing operations coupled with Rakon's leading technology would enable each company to offer new levels of value.
The companies also signed a deed enabling technology collaboration between them, he said.
Siward will appoint a director to Rakon's board, which faced a shareholder revolt at this year's annual meeting that led to executive director Darren Robinson being dumped.
Siward makes crystals and oscillators used in telecommunications and GPS devices, and has operations in Taiwan, China, Japan, Singapore, the US and Europe.
