16 Apr 2015
Laser giant Trumpf's subsidiary SPI Lasers takes on GSI's UK offshoot, a specialist in industrial and fiber lasers.
GSI Group, a developer of photonics components and subsystems for the medical equipment and industrial technology markets, has sold its JK Lasers subsidiary to SPI Lasers, Southampton, UK, a subsidiary of industrial lasers and toolmaking giant Trumpf , for approximately $31.5 million in cash.
JK Lasers - with almost 100 employees and annual sales of €17.6 million - develops and manufactures industrial lasers, including industrial fiber lasers for cutting, welding, drilling, and additive manufacturing functions in material processing applications. The business is headquartered in Rugby, UK, and employs approximately 100 people worldwide.
John Roush, CEO of GSI Group, commented, "We decided to sell JK Lasers for an attractive valuation in order to redeploy the capital to invest in our growth strategies of building world class franchises in our core businesses, such as laser scanning and beam delivery, low power CO2 lasers, medical technologies and precision motion products. Our focus will be on both organic growth through differentiated new products, and acquisitions that improve our capabilities in target applications."
The sale is expected to improve GSI's adjusted gross profit margins by approximately 1%. The JK Lasers sale does not qualify for discontinued operations accounting treatment. However, the Company plans to provide non-GAAP reconciliations that will exclude the results of JK Lasers for both 2014 and 2015.
The JK Lasers business generated approximately $22 million in sales in 2014, but did not have a material impact to GSI group's profitability in 2014. GSI group said it expects to record a pre-tax gain on the sale of approximately $17 million to $20 million, and expects cash proceeds of roughly $26 million to $28 million, excluding tax and transaction-related costs. GSI Group does not expect the sale to have a material impact to its 2015 non-GAAP earnings per share from continuing operations or adjusted earnings.
Last month, optics.org reported that GSI Group’s latest annual sales had been $364.7 million in 2014, which was up 15% on its 2013 figures; carbon dioxide and fiber lasers had each contributed to the increase in revenues in US firm’s performance. And in July 2014, France-based sister companies Amplitude Technologies and Amplitude Systèmes together acquired GSI Group’s Continuum scientific laser business.
About the Author
Matthew Peach is a contributing editor to optics.org.