27 Apr 2023
$110M agreement to buy Canadian manufacturer of spectral filters and other optical components.
IDEX, the diversified industrial technology company that acquired optical components firm CVI Melles Griot back in 2011, is to further expand its offering with a deal to buy Iridian Spectral Technologies.
Ottawa-based Iridian sells a range of thin-film optical filters, as well as beam-splitters and etalons that are used across applications in life sciences, telecommunications, spectroscopy, astronomy, and remote sensing.
IDEX says that the CAD$150 million (US$110 million) switch should be completed before the end of June, after which Iridian will become part of its optical technologies subsidiary, alongside both the former CVI Melles Griot business and Semrock, which also specializes in optical filters.
Eric Ashleman, IDEX’s CEO, said of the deal: “This acquisition strongly supports our strategic growth plan. It expands our talent, technology, and product portfolio in optical filters, enabling us to better compete in our core markets, and expand into new markets that we believe will drive profitable growth.”
Founded 25 years ago by its chief technical officer Brian Sullivan, Iridian has expanded to the point where its annual sales currently stand in the region of CAD$36 million, at healthy profit margins.
IDEX says the firm has “proven expertise” in optical filter design and production, as well as providing support throughout a product’s lifecycle, from initial prototyping to high-volume manufacturing.
“They offer advanced, proprietary thin-film design deposition and manufacturing technology of durable, high-performance filter optics,” stated the firm, also pointing to a strong brand reputation and an established, loyal customer base that complements IDEX’s existing presence.
During the Covid-19 pandemic Iridian introduced a line of “ultra performance” optical filters specifically designed to improve signal-to-noise output in real-time polymerase chain reaction (PCR) equipment needed for rapid identification of the viral infection in swab samples.
PCR equipment uses fluorescence signals to detect fragments of DNA or RNA amplified by the chain reaction that can then be used to identify pathogens responsible for influenza, Ebola, and many more besides Covid-19.
The company has also made a recent move into supplying optical filters for lidar sensing applications. According to Iridian these feature narrow bandwidths, higher transmission, and a low angular wavelength shift to enable a wider angle of incidence (AOI) detection range.
Inventory correction prompts cost-cuts
IDEX announced the plan to acquire Iridian alongside its latest financial results, covering the opening quarter of 2023.
The firm posted record sales of $845 million for the three months ending March 31, but CEO Ashleman warned that customers across the firm’s “Health & Science Technologies” segment - of which IDEX’s optical offering is a major part - indicated a larger and more prolonged inventory correction than had previously been anticipated.
“End market demand is still positive, but we believe our customers have sufficient inventory of our critical components to support that demand,” Ashleman told investors, adding that with divisional sales now expected to decline from 2022 to 2023, the firm had already begun implementing cost-cutting measures.
But the CEO remains upbeat about the longer-term prospects of markets served by the division, and said that Iridian represented a “highly strategic asset” expanding the firm’s optical filters portfolio.