News

1 November 2006

 

UK’s Photonic Products Ltd acquired by StockerYale

Photonic-based product provider StockerYale Inc of Salem, NH, USA has acquired privately held Photonic Products Ltd, UK, for $9.4m in cash, stock and bonds.

Founded in 1995, Photonic Products is an ISO9001:2000 certified manufacturer of custom designed laser diode modules. It is also an authorized distributor of industrial laser diodes; including blue-violet, red and infrared laser diodes from Sanyo, Sony and Opnext (formerly Hitachi); and high performance optical lenses from Panasonic. With forty-five employees, the company’s operations are located near Stansted, UK. Sales offices are located in Germany and the USA. Photonic Products’ founder and managing director Tony Pope will continue to manage the business, along with Damon Cookman as director of operations.

“Photonic Products now has access to StockerYale’s R&D resources, specifically its expertise in optics, to further drive new product introductions and to meet the needs of our customers,” said Pope. “Besides cost savings, we also expect to benefit from numerous cross-selling opportunities with each other’s customers and to access StockerYale¹s distribution channels throughout the world.”

Over the last five years, Photonic Products’ revenues have grown at a compound annual growth rate of 32%. Recently, the company invested in CNC manufacturing technology to increase production capacity and improve productivity. For the fiscal year ending December 31, 2006, Photonic Products expects sales to be approximately $9.5 million and to achieve a record operating margin of 15%.

StockerYale paid $9.4m for 100% of the outstanding stock of Photonic Products, consisting of $2.75m of newly issued StockerYale common shares (2,680,311 shares total); $4.25m in cash; and a three-year bond, with an initial principal amount of $2.4m and interest set at LIBOR plus 1%, payable to the sellers.

StockerYale expects the acquisition to add around $11-12m of revenue, and $1.5-2.9m of EBITDA to its fiscal 2007 (ending December 31, 2007) and an estimated pro-forma GAAP operating income of $0.9 - $1.3m.

“With this acquisition, StockerYale’s laser sales will double and our opportunity for future sales is considerably greater due to a more diversified laser product portfolio, multiple cross-selling opportunities and access to new markets for each other’s products,” said Mark W. Blodgett, chairman and CEO of StockerYale. “We expect that there will be significant cost savings accruing to StockerYale thanks to Photonic Products’ laser diode distribution business, as well as the opportunity to combine marketing efforts.”

Visit: http://www.stockeryale.com