- Excel Technology Buys CO2 Laser-Maker Synrad
Robert C. Pini
Pursuing a strategy to strengthen its laser products line, Excel Technology Inc. recently acquired Synrad Inc. of Mukilteo, Wash., a maker of sealed, all-metal CO2 lasers, for about $22 million. Wall Street investors initially reacted to the news by pushing up the price of Excel stock.
Excel Chairman and CEO J. Donald Hill said the deal fills a gap in the company's growth and marketing strategy. "We're trying to be a broad-based laser solutions company," Hill said. "Sealed CO2 laser technology has expanding applications in industrial and other markets, including low-cost laser solutions in which we have had limited or no participation until now."
With the purchase, Excel continues its steady acquisition of small companies that offer a well-defined product line and a good cash flow. Synrad joins six other firms in Excel's stable: Control Laser Corp. of Orlando, Fla., Quantronix Corp. of Hauppauge, L.I., Quantronix GmbH of Darmstadt, Germany, Optical Corp. of Oxnard, Calif., Photo Research Inc. of Chatsworth, Calif., and Cambridge Technology Inc. of Cambridge, Mass.
Hill expects the $20 million annual revenues from Synrad to grow as the company takes on a greater share of the estimated $60 million to $100 million worldwide market for sealed CO2 lasers. According to Hill, Synrad's growth rate has been significantly faster than the general market rate of growth for its main product lines. "This is a good area," he said. "I expect there will be significant competition."
Excel faces competition from DeMaria ElectroOptics Systems Inc. of Bloomfield, Conn., Rofin-Sinar of Plymouth, Mich., and Coherent Laser Group of Santa Clara, Calif., at the 100-W power level. "We'll do our best to maintain Synrad's dominance in the field," Hill said. "Change is a constant in this business, and it will continue to be. Synrad has some very good people. They are good operators. Synrad is world known, and we'll build on that."
Hill reports no plans to relocate Synrad and no major changes to its operations, but said Excel must determine whether to join sales and marketing departments. Before the purchase, Excel offered a range of lasers for diamond cutting, marking, research and micromachining.
According to Synrad manager Dave Clark, the company markets half its output within the US and half in Europe and Asia. "The real market today is the people who have never even seen a laser. They must see it as a tool or a component. It's got to be as easy to integrate as a tool or a blade cutter, then they can see how it will help them. We treat our lasers and design them to be light bulbs; you switch them on, and they go for a long time."
Clark said that Synrad also stands to gain from the deal. "Excel brings financial stability ... and also a strong organization in operations and management. To have somebody like Excel with a lot of experience in this area is truly beneficial to us."
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