The past several weeks have seen the announcement of two different business combinations in the European laser market, with the companies involved apparently seeking to improve their growth prospects by increasing scale and adding complementary operations.
One of the deals involves the proposed merger of the French firms Keopsys and Quantel—which have developed increasingly close ties in the past year—into a single entity, with the avowed aim of creating “a European champion for lasers.” In the other transaction, the Denmark-based NKT Photonics, a supplier of fiber lasers and photonic-crystal fibers, has inked an agreement to acquire Onefive, a Swiss company focused on ultrafast lasers.
Keopsys and Quantel
The Keopsys-Quantel merger—unveiled on 23 June, the day before the start of the Laser World of Photonics conference in Munich—would officially combine two companies that have become closely interconnected. In the final quarter of 2016, the founder of Keopsys, Marc Le Flohic, took over as CEO and chairman of Quantel, after a shareholder buyout led by Esira, a Le Flohic-controlled holding company, that allowed Esira to acquire a significant portion of Quantel shares. At the time that he took over the CEO position, Le Flohic declared that he intended “to develop synergies and collaboration between Quantel and Keopsys with a view to supporting their sustained growth for the years ahead.”
The newly announced merger would seem to be the ultimate step in that direction. The proposed deal would, according to the companies involved, create a combined entity with revenues of more than €80 million (based on 2016 full-year results). The companies also stressed, in the press release announcing the deal, its benefits in putting together the complementary product portfolios of the two firms—Keopsys, which has specialized in the fast-growing field of fiber lasers and fiber laser systems, and Quantel, whose offerings focus on more traditional semiconductor lasers, dye lasers, and other laser types.
Complex transaction
Echoing language he used when he became Quantel’s CEO last November, Le Flohic said that the two units “have built up expertise in very closely related technologies and market product ranges that will dovetail together perfectly.” The companies see particular promise in leveraging the combined entity’s breadth in securing “more ambitious contracts” from the defense sector, in which both firms currently operate. In an interesting turn of phrase, the company said that the proposed business combination “would make it possible to create … [a] European champion for lasers, offering an extensive range of high-performance lasers covering many different areas for application.”
Putting that champion on the field, however, will require negotiating a very complex financial path. Under the terms, the Le Flohic-controlled Esira would hold 54.7 percent of the combined firm’s capital, a level that, under French law, would ordinarily require a tender offer to purchase the entire company. (Quantel, however, is seeking a waiver of that rule; success in that quest is a condition of the deal.) And the transaction faces other regulatory scrutiny, including an evaluation of its fairness by independent auditors. The deal will be put to a vote at Quantel’s September 2017 shareholder meeting.
NKT Photonics and Onefive
In a separate announcement on 6 July 2017, NKT Photonics, the Danish supplier of high-performance fiber lasers and photonic crystal fibers, announced that it had entered into an agreement to acquire Onefive, a 41-employee manufacturer of ultrafast (femtosecond and picosecond) lasers based in Zurich, Switzerland. According to a press release from NKT announcing the proposed acquisition, while Onefive’s current customers are “mainly in the medical and life science segments,” NKT is particularly interested in the acquisition to bring “complementary know-how and products” that will enhance NKT’s core business in materials-processing lasers.
“It is a key element of our strategy,” Basil Garabet, NKT Photonics’ CEO, noted in the release, “to grow our business in the burgeoning material processing market. With Onefive, we significantly strengthen and enhance our product offering and know-how in this exciting market.” The purchase is not NKT’s first foray into ultrafast; in early 2016, it acquired another company, Fianium, a U.K.-based supplier of ultrafast and supercontinuum light sources.
The deal, subject to certain conditions, is expected to close at the beginning of September.