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Newport to Acquire Ophir Optronics
Jul 2011
Updated at 2:09 p.m. ET

by Melinda Rose, Senior Editor

IRVINE, Calif., July 8, 2011 — Laser, components and positioning systems manufacturer Newport Corp. reported today that it will strengthen its position in photonics instrumentation by acquiring Israel-based Ophir Optronics Ltd. for $230 million in cash.

Based in Jerusalem and established in 1976, Ophir makes infrared optics, laser measurement instrumentation and three-dimensional noncontact measurement equipment. It has manufacturing operations in Israel and the US (Massachusetts and Utah) and employs 650.

Ophir established its Massachusetts-based subsidiary, Ophir Optics LLC, in 2003. In 2006, Ophir acquired Spiricon Group, a Utah-based provider of laser beam profiling equipment. Ophir established a Switzerland-based subsidiary, Ophir Optics Europe GmbH, in 2007 to market IR optics for surveillance and imaging systems in Europe. In May 2010, Ophir acquired Photon Inc. of California to consolidate its position in the laser beam profiling market, according to its website. (See: Ophir Optronics Acquires Photon Inc.

Newport will pay $8.43 per share for Ophir, or $230 million. The company will become the third division of Newport, joining Lasers and Photonics and Precision Technologies (PPT).

For the fiscal year that ended March 31, 2011, Ophir had revenue of $111.8 million and operating income of $12.5 million. Ophir reported revenue of $30.2 million and operating income of $3.9 million for the first quarter of fiscal 2011.

The company has experienced a compound annual growth rate of about 19 percent over the past five years, and sales of its laser measurement instruments surged more than 30 percent in 2010 compared with 2009, reaching $33 million, according to its website. For fiscal year 2010, approximately 48 percent of its sales were to customers in the US, 34 percent in Israel and Europe, and 18 percent in Asia. Ophir is publicly traded on the Tel Aviv Stock Exchange.

Newport President and CEO Robert J. Philippy said in a conference call with investors and analysts Friday morning that Ophir's thermal imaging and 3-D noncontact measurement businesses are experiencing double-digit growth, and that the industry is on the threshold of an emerging growth opportunity in thermal imaging for commercial applications, in particular night-vision sensors for high-end automobiles.

Newport SVP and CFO Charles F. Cargile said in the same call that the company doesn't anticipate any reductions in staff, and that the acquisition will be immediately accretive to earnings even without "synergies," corporate-speak usually relating to cost savings that result from eliminating duplicated efforts or services.

In addition to the complementary product lines, Cargile said one reason Newport pursued the acquisition is because "Ophir has never incurred a loss in any fiscal year of its existence."

Cargile also gave investors and analysts a sneak peek into Newport's own expected earnings for the second quarter, which will be announced on Aug. 3. "We expect to report Q2 orders that reflect the highest level Newport has ever achieved, in excess of $140 million," Cargile said. He added that Q2 revenue is expected to exceed $130 million, its second-best level to date.

Philippy also announced during the call that Dr. Yaacov Zerem, chairman and CEO of Ophir Optronics, has agreed to lead the new company.

"Yaacov is very excited to stay on board," Cargile added.

The transaction is expected to close in the fourth quarter, subject to receiving required regulatory approvals, the approval of Ophir's shareholders and other customary closing conditions. 

For more information, visit:

In morphological image processing, a series of dilations followed by the same number of erosions.
thermal imaging
The process of producing a visible two-dimensional image of a scene that is dependent on differences in thermal or infrared radiation from the scene reaching the aperture of the imaging device.
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