4 Jul 2008 07:00
| For immediate release | 4 July 2008 |
Gooch & Housego PLC
Acquisition of General Optics
Gooch & Housego PLC, the specialist manufacturer of optical components and systems, today announces that it has entered into a definitive agreement to acquire the business and assets of General Optics from GSI Group, Inc for a cash consideration of US$21.0 million. The sale is expected to close within 60 days, pending regulatory approval.
General Optics is the global technology leader in super-polished optics. As a volume manufacturer of ultra-high quality optical components and coatings General Optics is a key supplier to the aerospace & defence sector, and also serves the telecommunications, semiconductor, metrology, biomedical and research markets. General Optics is the leading supplier of ring laser gyroscope (RLG) mirrors and frames to manufacturers of inertial navigation systems.
General Optics was founded in 1974 and was acquired by GSI Group Inc. (Nasdaq: GSIG) in 2000. It operates from manufacturing facilities located in Moorpark, California, where it employs 87 people.
For the 12 months ended 31 December 2007, General Optics had revenues of US$11.7 million and adjusted operating profits of US$2.1 million before amortisation of acquired intangible assets of US$1.0m resulting from the acquisition of General Optics by GSI Group, Inc. in 2000. The adjusted EBITDA of the business was US$2.8 million. The value of tangible assets to be acquired will be approximately US$5.5 million at closing. The consideration of US$21.0 million will be paid in cash. Funding of the acquisition consideration is being provided by the Company's bankers through secured debt facilities. The acquisition is expected to be immediately accretive and earnings enhancing (excluding the impact of the amortisation of acquired intangible assets).
The Directors of Gooch and Housego believe the key benefits of the acquisition are that it will:
Increase the Group's exposure to the important US aerospace & defence market
Enhance the capabilities of the Group through the addition of key enabling technology
Bring long standing relationships with customers giving long term revenue visibility
Facilitate access to the large US precision optics market
Provide an opportunity to market the Group's broader product range to the customers of General Optics
Provide General Optics with greater market exposure via the Gooch & Housego global sales organisation
Gareth Jones, Chief Executive of Gooch & Housego, commented:
"The acquisition of General Optics is the latest step in delivering our strategic objectives of gaining greater
presence in key target markets and in securing a leading or dominant position in the fields in which we operate.
General Optics is a business that Gooch & Housego has always held in high regard. Its pre-eminent
position in super-polished optics is highly complementary to our precision optics manufacturing capabilities in Ilminster, UK, but extends our reach by providing us with access to the important US aerospace & defence sector as well as a presence in what is the world's largest market for high-end optics. We look forward to working with the employees and management to continue the development of the business."
This transaction is a substantial transaction under Rule 12 of the AIM Rules for Companies (the "AIM Rules").
This announcement is made in accordance with Rule 12 and Schedule 4 of the AIM Rules.
No statement above constitutes a profits forecast or should not be interpreted to mean that earnings in any period will be higher than or equal to earnings in a previous period.
To effect the acquisition, Gooch & Housego (California) LLC, a subsidiary of Gooch and Housego PLC, will enter into an asset purchase agreement with GSI Group Corporation (a Michigan corporation), a subsidiary of GSI Group, Inc (a Canadian corporation).
For further information, please contact:
| Gooch & Housego Gareth Jones / Peter Quinn | 01460 256440 |
| Investec Bank (UK) Limited Michael Ansell / Patrick Robb | 020 7597 5970 |
| Buchanan Communications Tim Thompson / Nicola Cronk | 020 7466 5000 |
About Gooch & Housego PLC
Gooch & Housego is a manufacturer of acousto-optic and electro-optic devices, precision optical components, crystals, optical instruments and imaging systems. Based in Ilminster, UK, it has operations in the UK, USA and Germany. In several of its activities Gooch & Housego is considered a world leader. The Queen's Award for Enterprise: International Trade was conferred upon the UK business in 2006.
About General Optics General Optics operates from facilities in Moorpark, California, totalling 52,000 square feet. In addition to the core RLG component business General Optics applies its super-polishing and thin-film coating capabilities to a wide range of optical materials for use in an even broader range of applications. The manufacturing operations are supported by extensive metrology capabilities. General Optics owns four patents in the fields of optical fabrication and optical circuits.
Gooch & Housego (GHH)