Precision Optics Corporation (Gardner, MA), designer and manufacturer of optical instruments for the medical and defense industries, completed the acquisition of certain assets of Ross Optical Industries (El Paso, TX).
The acquisition extends Precision Optics’ product offering to include a wider range of lens and optical system sizes and expands its presence in the U.S. defense sector. Further, it allows the combined company to leverage Precision Optics’ technical proficiency in offering end-to-end solutions, from design through production, to the expansive Ross Optical customer base, increasing its value-add capabilities.
Ross Optical had revenues of $3.9 million and net income of $410,000 for the 12-month period ended December 31, 2018. As part of the transaction, Precision Optics is acquiring slightly over $1 million of net working capital. The total purchase price is up to $2 million, comprised of $1.5 million in cash at closing and additional payments up to $500,000 subject to a three-year earnout provision. Precision Optics completed an equity capital raise of $950,000 at a per share price of $1.25 concurrent with the closing of the acquisition.
Incorporated in 1989, Ross Optical has evolved from an optical components supplier into an expanded solutions provider, with optical fabrication and quality assurance equipment, technology, and technical solutions that supply the defense, medical, and industrial markets. Focused on high-quality and difficult-to-find optical components, Ross Optical provides custom solutions as well as a wide range of standard lens sizes.
Joe Forkey, president and CEO of Precision Optics, said, “The strategic acquisition of Ross Optical is an important addition to the Precision Optics portfolio which broadens our capabilities and accelerates our efforts to gain economies of scale. We are excited to bring the operations and employees of Ross Optical to the Precision Optics family. Over the past couple years, Precision Optics has capitalized on its expertise in micro and 3D imaging within the medical and defense industries by working with customers from the early design stage of projects to develop solutions that are now moving to commercial scale production. With this acquisition, we see a number of opportunities to leverage our respective strengths to expand existing customer relationships, and to develop new ones, based on the broader offerings of the combined company.”
Divi Mangadu, who has been Ross Optical’s long-standing president, has agreed to continue in that role for a seamless transition. Precision Optics will continue to operate the acquired entity under Mangadu’s leadership in its existing facility in El Paso, TX and anticipates significant cooperation between sales, engineering, and manufacturing teams of the two operations.
SOURCE: Precision Optics Corporation; https://www.poci.com/files/POC%20Press%20Release%20Ross%20Optical%208July2019%20FINAL.pdf
