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Axsys Technologies Acquires Telic Optics
May 26, 2004 |Estimated reading time: 1 minute
Rocky Hill, Conn. and North Billerica, Mass. — Axsys Technologies Inc. has acquired all of the stock of Telic Optics, effective April 8, 2004.Founded in 1986, Telic employs 32 people and sells its products to manufacturers of thermal imaging cameras, defense prime contractors and research laboratories who design systems used in long-range reconnaissance, surveillance and targeting applications for the defense and homeland security markets.
Axsys is a leading supplier of metal optics and opto-mechanical assemblies used in reconnaissance, surveillance and targeting applications, primarily for air- and space-based applications. The acquisition of Telic provides Axsys with the following key strategic benefits:
- Telic's broad infrared optics capabilities increase Axsys' product offerings and complement Axsys' strong position in metal mirrors. Axsys estimates that the infrared lens market is three times as large as the metal optics market.
- Telic's products are typically used in ground- and sea-based programs. This complements Axsys' historical focus on air- and space-based programs and expands Axsys' overall market and program penetration.
- The combination of Axsys' and Telic's opto-mechanical integration capabilities is expected to enable Axsys to increase its competitive advantage and technical offering to prime contractors seeking to outsource optics-based subassemblies.
The initial purchase price of this acquisition is $14 million with an additional $4 million earn-out over the next 36 months if certain revenue goals are achieved. If all revenue goals are achieved, the total purchase price could reach $18 million. Axsys funded the initial cash portion of the purchase price and associated transaction costs through a combination of existing cash balances and outside financing. In connection with the transaction, Axsys has arranged a $10 million credit facility with Fleet National Bank, a portion of which was used to fund the acquisition.
Management expects the acquisition of Telic to increase Axsys' consolidated revenues by approximately $5.5 to $5.8 million and operating profit by approximately $1.5 to $1.7 million for the balance of fiscal 2004. Previously Axsys had indicated guidance for 2004 operating results of 5 to 7 percent growth in revenue and 18 to 20 percent growth in operating income compared to 2003. The addition of Telic's expected results for the last three quarters of 2004 necessitates the revision of previous guidance. Revenue growth is now expected to be 11 to 14 percent with operating income growth of 48 to 54 percent.
Axsys Technologies Inc. is a vertically integrated supplier of precision optical and motion control components and assemblies for high-technology applications. For more information, visit www.axsys.com.