Thales sells High Tech Optics group

Multinational defense giant Thales and Candover Investments plc have agreed on the sale of Thales High Tech Optics (HTO) operations.

LONDON, ENGLAND - Multinational defense giant Thales and Candover Investments plc have agreed on the sale of Thales High Tech Optics (HTO) operations. Candover has acquired the businesses, regarded as non-strategic for Thales, for a cash settlement of EUR 220 million (US$265 million), conditional on regulatory approval.

Thales plans to use the cash generated by the sale to expand what it sees as its core areas in defense and security markets.

“With this sale, Thales has divested non-core businesses,” said Jean-Loup Picard, senior VP for strategy, research, and technology at Thales. “We bought Avimo and Pilkington for their optronic system capabilities which will continue to be part of our key product portfolio but we do not believe it is in the best interests of these HTO businesses to remain under our ownership.”

With the existing management also investing in the transaction, there are indications that the new optics business will get off to as flying start, and that further acquisitions and expansion are both likely. HTO specializes in the design and manufacture of high precision optical components and modules for applications in avionics, defence optics, night vision and space. Products include head up displays, advanced optics modules for defence equipment and infrared optics programs, night vision sites, and coatings for satellites. The company’s principal operations are in the UK, including part of what was Pilkington at St Asaph, and in Singapore. It also includes various manufacturing or commercial activities in France, Germany, Hungary, and the United States. The company employs approximately 1400 people and reported revenues of EUR 124 million (US$149 million) in 2004.

In the HTO deal Candover is backing a management team with extensive industry experience, led by CEO Benoit Bazire.

“We have ambitious plans for HTO and plan to create an unrivalled global player able to offer customers a full range of products and services in the high tech end of the optics value chain,” Bazire said. “Candover has indicated its full support for our growth strategy and we welcome them as our new owner.”

Established in 1980, Candover specializes in arranging and leading large buyouts and buyins. To date the company has invested in 125 deals with a total value of more than EUR 25 billion (US$30 billion), and claims that almost 90% of the companies it has backed have achieved successful exits via stock market listings or trade sales.

“HTO fits Candover’s investment criteria perfectly,” said Cyril Zivré, director of Candover. “It is a global leader in its field; it has a niche position in an industry with significant growth potential; enjoys long established relationships with its large customer base; and is led by an experienced and well respected management team. HTO provides us with a strong platform for industry consolidation and we look forward to working with management to identify acquisition and expansion opportunities.”

- Bridget K. Marx

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