March 25, 2005, Rocky Hill, CT--Axsys Technologies announced that it has entered into a definitive agreement to acquire Diversified Optical Products (DiOP), a privately held manufacturer of high-end thermal surveillance camera systems and lenses, for US$60 million in cash.
DiOP is a leading supplier of infrared surveillance solutions to the U.S. Border Patrol, Army, Navy, Air Force, Coast Guard, and various Port Authorities. In addition, DiOP manufactures an array of infrared cameras for law enforcement, firefighting, and commercial perimeter security applications. Finally, DiOP is a leading OEM supplier of military-grade thermal targeting and imaging lenses. DiOP's success in the thermal surveillance space is largely due to its expertise in infrared lens production, the most critical technology in an infrared surveillance camera. DiOP employs approximately 120 people at its Salem, NH headquarters. Total sales for the calendar year 2004 were $22.3 million.
"The purchase of DiOP is a fundamental step forward for Axsys," said Stephen W. Bershad, chairman and CEO of Axsys Technologies. "While we expect that this acquisition will be modestly accretive to earnings in 2005, more importantly it presents an array of strategic benefits. The addition of DiOP brings new, high value technologies to Axsys, leverages our existing technologies, and provides a new base of customers for the Company. We will immediately establish a strong position in the fast-growing homeland security surveillance market, bolster our existing infrared lens business, and create a new focus for our motion control business."
Axsys has obtained commitments from financial institutions for up to $70 million to fund the transaction and provide working capital. Closing is anticipated in the second quarter of 2005 following the completion of customary closing conditions. Axsys will revise financial guidance subsequent to closing.