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17 Feb 2025
Optical component and system maker agrees $27M acquisition of high-end MWIR camera producer.
LightPath Technologies, the Florida-based maker of infrared optical components and systems, has agreed what it describes as a “transformational” deal to acquire the thermal imaging and optics specialist G5 Infrared.
Valued at $27 million, the cash-plus-stock agreement expands both LightPath’s vertical integration and its spectral coverage, with G5 Infrared’s expertise ranging from mid-wave infrared (MWIR) imaging systems to thin-film optical coating deposition enabling high-performance, long-range capabilities.
‘Transformative step’
Established in 2011, and with a manufacturing site at its Hudson, New Hampshire, headquarters, G5 Infrared is said to have generated “at least” $15 million in sales in 2024, with that figure expected to rise in the near future. For comparison LightPath’s recent quarterly sales have been in the region of $7.5 million.
LightPath CEO Sam Rubin said in a statement announcing the deal: “The acquisition of G5 Infrared is a transformative step in our strategy to become a leading vertically integrated provider of infrared imaging solutions.
“G5 brings deep expertise in high-end cooled infrared camera systems and is considered the market leader in long-range imaging, which perfectly complement[s] our existing uncooled camera technology.”
As an example highlighting the kind of performance that technology is capable of, Rubin said that G5 Infrared cameras were able to identify vehicles from a stand-off distance of some 68 kilometers.
The CEO added that by integrating G5's capabilities with LightPath’s proprietary ‘BlackDiamond’ glass and in-house optics manufacturing, the company would enhance its ability to deliver high-performance imaging technologies across defense and commercial applications.
Sales ramp expected
He also said that the business combination would likely achieve annual revenues of “at least” $55 million over the coming twelve months, while adding established programs with US military and federal agencies.
“With most critical optical components and materials now produced internally, we expect to accelerate both growth and new product innovation,” he noted.
Lou Fantozzi, who has been G5 Infrared for the past seven years, commented: “We are eager to join the LightPath family, bringing what we believe is a highly incremental and complementary product offering to the robust product suite offered by LightPath today.
“Together, we believe we can significantly ramp sales, bring new products to market and ultimately drive enhanced profitability for shareholders. I look forward to working closely with Sam and the LightPath team in the months ahead.”
During LightPath’s latest quarterly earnings investor conference call, Rubin said that the G5 Infrared agreement represented the latest step in LightPath’s strategic transition.
“Up until about four years ago, LightPath was a pure-play optical component manufacturer,” he said. “The core technology for LightPath, up until that point precision glass molding, was an innovative technology in the early 2000s.”
But with that technology becoming fully commercialized and commoditized, LightPath faced aggressive competition and was effectively pushed out of the market by 2020, explained the CEO.
Up the value chain
Since Rubin took over in late 2020, the goal has been to reposition LightPath as a provider of optical systems and solutions, starting with optical assemblies, then compact thermal cameras, and - thanks to the 2023 acquisition of Visimid - thermal imaging and night vision technologies that have since been adopted by defense giant Lockheed Martin in a new missile program.
“The addition of G5 Infrared fits naturally into what we have been building, and is a logical next step in our journey,” Rubin told investors. “Not only do G5’s products complement LightPath’s products perfectly; G5 is also at a pivoting point, about to be awarded some large, lucrative defense programs.”
He pointed out that completion of the deal will mean that in just four years, LightPath has gone from a company selling sub-$10 lenses to one offering high-performance thermal cameras costing tens of thousands of dollars.
With only $3 million on its balance sheet at the end of 2024, LightPath is financing the deal through a combination of $6.75 million in common shares and $20.25 million in cash raised through new convertible warrants and preferred equity arrangements with lenders.
As well as financing the G5 Infrared deal, which is expected to complete February 19, the injection of new cash is expected to strengthen LightPath’s balance sheet, and enable further investment in growth opportunities.
China germanium ban
Turning to other developments in LightPath’s latest trading quarter, Rubin highlighted the decision by the Chinese government in December to ban the sale of germanium to any US company - a move that also impacted the firm's orders of other infrared materials like zinc selenide and zinc sulfide.
Although that has delayed some of the company’s sales from 2024 into 2025, the CEO emphasized that no sales had been lost. “We have many other suppliers and are recovering from the small hiccup,” he told investors, pointing out that on the plus side the firm has seen a surge of interest in its BlackDiamond chalcogenide glass, which offers an alternative to germanium.
But because of the timing of the Chinese germanium ban, LightPath’s December 2024 quarter sales came in at $7.4 million, a little below expectations and up only very slightly year-on-year. That translated to a pre-tax loss of $2.6 million, widening from $1.6 million a year ago.
• Shortly after revealing details of the acquisition and financing arrangement, LightPath's Nasdaq-listed stock price dropped in value by around 7 per cent and is now equivalent to a market capitalization in the region of $100 million.
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