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Private equity group agrees $19M acquisition of Inrad Optics

10 Apr 2024

Luxium partnership says new owners will accelerate investment into large-format optical components and more.

US-based optical component and assembly maker Inrad Optics is set for a private equity buy-out, after its senior management team and key lenders agreed a deal with crystal maker Luxium Solutions.

In partnership with SK Capital Partners and Edgewater Capital Partners, Luxium - previously Saint-Gobain’s crystals subsidiary - will acquire Inrad for $19 million in cash, unless a superior offer is received within the next month.

Under the terms of the deal, Luxium has agreed a purchase price of $1.10 per share, with Inrad’s lead creditors Clarex and Welland - who hold $2.5 million in convertible loan notes along with a major shareholding - agreeing to convert that debt into equity in support of the transaction.

“Following the closing of the transaction, Inrad Optics expects to benefit from the significant resources, operational expertise and capacity for investment provided by Luxium, SK Capital and Edgewater,” announced the Northvale, New Jersey company, which sells optical components, X-ray imaging optics, and metal substrate optics, alongside thin-film coating and opto-mechanical design services.

“Under the new ownership, Inrad Optics will be able to accelerate investments in technologies that are vital to development of next generation bent X-ray crystal monochromators for spectroscopy and plasma fusion applications, and large-format, ultra-high precision optical components and assemblies.”

Profitable 2023
Inrad’s CEO Amy Eskilson, who has headed up the company for more than a decade, said in a release announcing the deal:

“SK Capital and Edgewater have a demonstrated record of success building businesses and a desire to support Inrad Optics in advancing our long-term strategic objectives as part of a stronger combined organization with Luxium.

“As a part of a private company, we will have enhanced flexibility and additional financial resources to build on Inrad Optics’ strong foundation, further scale operations, and capture significant opportunities in rapidly growing markets.”

Inrad’s most recent annual report shows that the firm posted sales of $12.9 million in 2023, up more than 20 per cent on the 2022 total - with net income rising from $0.2 million to $2.7 million as a result.

However, bookings dropped significantly last year, with Inrad saying that 2022 witnessed “extraordinary demand” from customers to secure capacity for optical and x-ray components in the process control and metrology sector.

Saint-Gobain crystal expertise
Ohio-based Luxium, which also has operations in France and India, was itself acquired by SK Capital and Edgewater in December 2022, having previously been the scintillation and photonic crystals business belonging to global glass giant Saint-Gobain.

The firm provides single scintillation crystals for radiation detection applications, as well as sapphire and garnet substrates for photonics and power electronics applications, and is fully vertically integrated with crystal purification, growth, cutting and finishing, packaging, and electronics integration capabilities.

Its CEO Michael Cahill commented: “In our view, Inrad Optics is a well-positioned and attractive business in ultra-high precision optical components, with an incredible team and multiple opportunities for success.

“Luxium continues to execute on our strategy, and with the addition of Inrad Optics, we remain dedicated to our conviction to focus on materials science solutions and photonic technologies the market demands.

“We believe Inrad Optics will provide unique and complementary capabilities to Luxium, and our objective is to support the combined team to push the boundaries of innovation, ensuring successful outcomes for our customers.”

According to the Luxium announcement, the Inrad agreement includes a 30-day “go-shop” period that expires May 8, during which time potentially superior acquisition proposals from third parties can be solicited.

Assuming that doesn’t happen, the Luxium deal should be completed by the middle of this year, with Inrad set to continue to operate under the same brand, and to maintain its current headquarters in Northvale.

News of the Inrad deal comes just a month after Luxium and its backers said that they had agreed to acquire New York-based PLX and its UK subsidiary, which specialize in high-end monolithic optics used mainly in space and defense applications.

"The PLX team is comprised of renowned experts in light manipulation and laser tracking and beam alignment, bringing a wealth of knowledge in optomechanical engineering and systems integration expertise, which is supported with a portfolio of intellectual property," said Cahill of that deal.

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