General Scanning and Lumonics Agree to Merge
ROBERT C. PINI
Laser system manufacturers Lumonics Inc. of Kanata, Ontario, Canada, and General Scanning Inc. of Watertown have agreed to form a $330 million company called GSI Lumonics Inc. According to Victor Woolley, vice president and chief financial officer of General Scanning, the deal gives the combined firm a broader product line in laser power. Woolley expects the merger will make it easier to target sales in more than 40 countries and enable the company to reach customers who use the laser marking and manufacturing systems in their far-flung operations.
Under terms of the merger, shareholders of General Scanning will receive 1.347 shares of Lumonics for each share held, and holders of Lumonics stock will retain their existing shares. GSI Lumonics will report its financial results in US dollars and be headquartered in Watertown.
Woolley noted that the companies have little competitive overlap and said he sees good opportunities for cross-selling products. He predicted that the fastest growth for the new company will come from automotive, aerospace, medical and life science products. It will have diversified sales in electronics (19 percent), semiconductor manufacturing (18 percent), medical devices (15 percent), automotive (9 percent), aerospace (6 percent) and other segments combined (29 percent).
In response to news of the merger, Robert Schricker, vice president of sales at Lee Laser in Orlando, Fla., predicted more mergers in the laser industry, recalling Excel Technology Inc. of New York and its recent acquisition of Synrad Inc. of Mukilteo, Wash. Bill Shiner, vice president of sales and marketing at Convergent Energy in Sturbridge, Mass., agreed with the outlook and suggested that consolidation is being driven to some extent by the large outlays of time and expense required to commercialize a laser from the point of research and development.
As GSI Lumonics, the new company expects to have better potential for long-term growth. Woolley highlighted some products that should perform well: a trimmer system that does finishing of electronic components, digital medical imaging products and package-marking lasers, which will get a boost from tighter European requirements for packaging foodstuffs.
Lumonics Chairman Robert J. Atkinson will be chairman of the board of GSI Lumonics, and the new board of directors will be drawn equally from both of the sitting boards. Charles D. Winston, president and CEO of General Scanning, will become the new CEO of GSI Lumonics. Pending regulatory and shareholder approval, the deal will close during the first quarter of 1999.