NOVEMBER 10--StockerYale Inc. (Salem, NH; www.stockeryale.com), an independent provider of photonics-based products, has reached an agreement in principle to acquire Navitar Inc., a Rochester, NY-based company, in a transaction valued at approximately $25.5 million. Navitar is a manufacturer and supplier of superior quality optical lens systems and complete customized optical solutions for the machine-vision and biomedical diagnostics industries.
The two companies have signed a nonbinding letter of intent. This letter agreement is subject to the satisfactory completion of due diligence, the execution of a definitive purchase agreement, and the closing of a financing transaction. The acquisition is currently anticipated to close before the end of the fourth quarter of 2004.
With the acquisition of Navitar, StockerYale is expected to achieve combined revenues of $43 million for 2004. The business combination will also have an immediate positive impact on earnings and cash flow. In addition, StockerYale has identified significant opportunities for product development, marketing, and sales synergies, expanding the scope of its target markets. Richard P. Lindsay, StockerYale chief financial officer, stated, "We expect that the acquisition will allow StockerYale to more rapidly scale its business, improve visibility with both customers and investors, and strengthen overall financial performance. Navitar has consistently demonstrated a strong track record of revenue growth, profitability and cash flow generation. Navitar's stable operating performance will complement StockerYale's 24% growth in revenues and a 45% growth in gross profit for the first nine months of 2004." StockerYale also expects to realize other financial benefits from the acquisition through utilization of the StockerYale's tax loss carryforwards and the reduction of redundant professional fees.
"This Navitar acquisition represents a tremendous opportunity for StockerYale. The transaction combines our strong position in illumination components with Navitar's leading portfolio of lens systems. The combined company will offer one of the broadest product offerings to machine vision OEMs, as well as to the biomedical and defense markets," said Mark W. Blodgett, chairman and chief executive officer. "StockerYale's R&D efforts in lasers, LEDs, and fiberoptic components when joined with Navitar's product-development initiatives will accelerate new product innovations and increase the speed of new inspection solutions to the market. Increasingly, customers are requiring cost-effective solutions integrating illumination components and optical lenses to detect defects or perform critical measurements. Given that the machine-vision industry has historically been highly fragmented, the combined company will become one of the leading value-added subsystem suppliers to this growing market.
"The company will serve its global customer base with enhanced technical sales coverage in the USA, Japan, China, Germany, and Israel, serving many of the world's fastest-growing inspection markets. In addition, the acquisition of Navitar will position StockerYale in the rapidly growing market for LCD and DLP projectors, where Navitar is a leading supplier of aftermarket projector lenses."
