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08 May 2024
Two years after it was first agreed - and a year since it was initially blocked - the deal is set for completion.
Copenhagen-headquartered NKT Photonics is once again set to become part of Japan’s Hamamatsu Photonics, after a €205 million deal originally struck by the two companies two years ago was finally cleared by the Danish Business Authority.
Although the initial agreement was cleared by authorities in the US, UK, and Germany, nearly a year later the two firms said that the deal appeared off, after it was blocked under the Danish Foreign Investment Act.
Shortly after that decision Jens Due Olsen, the chairman of parent company NKT, said in a May 2023 investor conference call:
“We have not received any other reason than that it is for so-called national security reasons and that we will not receive any other explanation. Also, we cannot appeal and we cannot really get any insights into the merits for the prohibition as it is grounded in national security.”
However, Hamamatsu swiftly revived its bid with the relevant authorities, and says it received confirmation of approval from the Danish Business Authority on May 6.
NKT and Hamamatsu both said that the transaction should now be completed by the end of June. According to NKT’s latest quarterly report, NKT Photonics recorded pre-tax earnings of €6 million on sales of €88 million in 2023, but a pre-tax loss of €5 million on sales of €16 million in the opening quarter of this year.
Complementary technologies
Olsen said of the on-again deal: “We are pleased that the approval has been obtained and that NKT Photonics can now be divested to Hamamatsu. This will maximize the value creation and position NKT Photonics for long-term growth.
“For NKT, the divestment marks the final step in the process to fully focus the company on our core business within power cable solutions, where we have announced several investments in the past year to support the green transition of societies.”
Back in June 2022, Hamamatsu said that the acquisition would help it to expand its laser applications business, pointing out that the supercontinuum white light lasers developed by NKT Photonics had become important in both microscopy and semiconductor device inspection.
NKT Photonics added that it should benefit from complementary Hamamatsu components such as detectors and diodes, which would enable both new product development, as well as significantly increased purchasing power.
Speaking during an investor conference call held May 8, NKT’s CEO Claes Westerlind said little more about the deal, other than to confirm that the transaction was now in the process of being closed, and should be completed by the end of next month.
Hamamatsu said that it was now considering the likely impact of the acquisition on its financial results for the year ending September 2024.
The Tokyo-listed company said previously that it had been expecting to post annual sales of just over ¥224 billion (€1.34 billion), up slightly from the previous year’s total of ¥221 billion.
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