LightPath Technologies, a manufacturer, distributor and integrator of optical and infrared components and assemblies, is set to acquire ISP Optics for $18 million.
The acquisition will not only expand LightPath’s infrared market reach to include major operations in Asia, North America and Europe, but increases the company’s served available market (SAM) from $800 million to $1.7 billion.
Headquartered in New York State and with major manufacturing operations in Latvia, ISP is a manufacturer of infrared optical components, coatings, and optical subsystems. ISP’s primary vertical markets are infrared lenses for sensors, military electro-optical products and infrared imaging cameras.
In 2015, ISP generated – on a consolidated basis – $12.1 million of revenue, $1.5 million of net income and $3.1 million of adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA). ISP’s 2015 consolidated revenues grew 17 per cent year-over-year, and adjusted EBITDA was 25.7 per cent.
LightPath plans to finance the cash portion of the purchase price through a combination of the offering and issuance of LightPath’s common stock and debt financing. Upon closing, ISP will become a wholly-owned subsidiary of LightPath. LightPath expects the transaction to be accretive during the first 12 months.
'The collective technological capabilities of LightPath and ISP position us for continued high growth, with concentration in key markets for infrared sensors, global military electro-optical infrared products and infrared imaging cameras,' commented ISP CEO Officer Mark Lifshotz. 'We will create one full service company able to offer our customers a single source for all their infrared needs.'
Jim Gaynor, president and CEO of LightPath, added: ‘The acquisition of ISP Optics will accelerate growth and materially expand our size and, more importantly, our scope of products and capabilities. Bringing together the two companies creates substantial synergies, such as the… expansion of each company’s distribution channels benefiting from LightPath’s strong Asian presence and ISP’s strong European presence, leveraging the value of combining moulded and turned product designs.’
LightPath intends to close the financing needed for the acquisition in the fourth quarter of calendar year 2016, with the acquisition expected to close at or around the same time. LightPath will seek a fairness opinion with respect to the transaction.