Jan 10, 2017
- Broadens Novanta's breadth of photonics solutions to the medical market
- Novanta acquires an additional 35 percent of the outstanding shares of Laser Quantum for approximately £25.5 million
BEDFORD, Mass., Jan. 10, 2017 /PRNewswire/ -- Novanta Inc. (NASDAQ: NOVT) (the "Company", "we", "our", "Novanta"), a global leader and supplier of photonics, precision motion, and vision technologies to original equipment manufacturers in the medical and advanced industrial markets, announced today that it has acquired approximately 35 percent of the outstanding shares of Laser Quantum for £25.5 million in cash.
Laser Quantum, based in Manchester, United Kingdom, is the leading supplier to original equipment manufacturers (OEMs) of solid state continuous wave lasers, femtosecond lasers, and optical light engines for the medical market.
"Laser Quantum increases Novanta's breadth and technology capability in photonics solutions for medical applications. Particularly, it gives Novanta a significant presence in the growing DNA sequencing market, a technical subsystem capability in software-controlled integration, while also providing the company with key enabling photonics-based technologies for instrumentation and life sciences applications such as biomedical imaging, cell sorting, and ophthalmology," said Matthijs Glastra, Chief Executive Officer of Novanta Inc. "Our increased ownership stake brings together two highly successful photonics businesses, with an emphasis on addressing mission critical applications within the medical market."
"Laser Quantum is a high quality business, with strong intellectual property and a long-tenured team that we trust and know well. Laser Quantum and Novanta have collaborated closely for over 10 years, and this step is a natural evolution in our partnership," said Mr. Glastra. "Furthermore, we see strong potential in selling the combined product offerings of both companies to each company's customer base."
Novanta's ownership position in Laser Quantum has increased from approximately 41 percent to approximately 76 percent. Prior to this acquisition of additional shares, Novanta's 41 percent interest in Laser Quantum was accounted for under the equity method of accounting. After Novanta's purchase of the incremental 35 percent stake, Laser Quantum will become a consolidated subsidiary of Novanta and the remaining 24 percent stake in Laser Quantum will be reported as minority interests. The acquisition will be accounted for similar to a business combination with all of Laser Quantum's assets and liabilities being reported at fair value as of the closing date. The excess fair value over the carrying value attributable to Novanta's existing 41 percent equity interest shall be recognized as a one-time non-cash gain in Novanta's consolidated statement of operations. In addition, Novanta and Laser Quantum have entered into a call and put option for the purchase of all remaining Laser Quantum outstanding shares held by the minority shareholders by 2020, subject to certain conditions.
The total purchase price of £25.5 million was financed with cash on hand and borrowings under the Company's amended and restated credit facility. The transaction, which is expected to be immediately accretive to Novanta's free cash flow and non-GAAP earnings per share, is expected to add approximately $25 million in revenue to Novanta's financial results on a full year pro forma basis.
Safe Harbor and Forward-Looking Information
Certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. These forward-looking statements include, but are not limited to, statements regarding operating or financial results, the success of our internal plans, the prospects for the acquisition of Laser Quantum to contribute to our future growth and profit expectations. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "expect," "intend," "anticipate," "estimate," "believe," "future," "could," "should," "plan," "aim," and other similar expressions. Such statements reflect the current beliefs of Company management and are not guarantees of future performance. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement. Such risks and uncertainties include our ability to make and integrate our acquisitions and realize expected synergies. We also face other general risks, including our ability to realize cost savings from our operating initiatives; general economic conditions; unfavorable changes in foreign currency exchange rates; difficulties associated with exports; risks associated with our international operations; risks associated with newly acquired businesses; our significant dependence upon our customers' capital expenditures, which are subject to cyclical market fluctuations; increased warranty exposure; future competition; violations of our intellectual property rights and our ability to protect our intellectual property against infringement by third parties; our ability to attract and retain key personnel; disruptions in the supply of certain key materials or components; changes in the price for certain parts and components; changes in interest rates; changes in tax laws; credit ratings; risks in complying with local import and export regulations in the jurisdictions in which we operate; risks and cost associated with potential write-offs of our substantial intangible assets; and risks associated with maintaining regulatory compliance. Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company's operating results and financial condition are discussed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, our subsequent filings with the Securities and Exchange Commission ("SEC"), and in our future filings with the SEC. Such statements are based on the Company's beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this document except as required by law.
Novanta is a leading global supplier of core technology solutions that give advanced industrial and healthcare OEMs a competitive advantage. We combine deep expertise at the intersection of photonics and motion with a proven ability to solve complex technical challenges. This enables Novanta to engineer core components and sub-systems that deliver extreme precision and performance, tailored to our customers' demanding applications. We deliver highly engineered photonics, vision and precision motion solutions to customers around the world. The driving force behind our growth is the team of innovative professionals who share a commitment to innovation and customer success. Novanta's common shares are quoted on NASDAQ under the ticker symbol "NOVT".
More information about Novanta is available on the Company's website at www.novanta.com. For additional information, please contact Novanta Inc. Investor Relations at (781) 266-5137 or InvestorRelations@Novanta.com.
Investor Relations Contact:
Robert J. Buckley
SOURCE Novanta Inc.