Luna Innovations acquires sensing firm OptaSense for $40M

04 Dec 2020

Combination is expected to transform Luna into a major distributed optical fiber sensing systems developer.

Luna Innovations, a US headquartered developer of fiber-optics- and terahertz-based technologies, has acquired OptaSense from QinetiQ, a UK-based diverse technologies firm, for £29 million (ca. $40 million) in cash.

OptaSense is a developer of fiber optic distributed monitoring solutions for applications such as pipeline observation, oilfield services, security, highway and railway monitoring, and power and utilities monitoring systems. Luna says the combination “is expected to create the world’s largest fiber optic sensing company.”

“The acquisition of OptaSense marks an incredibly important milestone in Luna’s history and will further support our growth trajectory,” said Scott Graeff, President and Chief Executive Officer of Luna.

“With the combination of Luna and OptaSense, we are bringing together businesses with strong adjacencies and a large, combined opportunity. This transaction allows Luna to acquire a leader in fiber optic sensing solutions and distributed acoustic sensing systems of a size and scale that will be transformative to our company.”

The acquisition provides Luna with important distributed acoustic sensing intellectual property and products, which complement Luna’s existing portfolio, and provides algorithm-development expertise, critical for AI and machine learning.

OptaSense’s research and development team and salesforce, combined with more than 150 active and pending patents, is also expected to enhance Luna’s current set up and broaden its intellectual property portfolio.

Steve Wadey, QinetiQ CEO, commented, “The sale of OptaSense to Luna will provide greater synergies and relevant market access to enable and accelerate their future growth.”

OptaSense will become a fully owned subsidiary of Luna Innovations Inc., while continuing to operate under its existing brand for the foreseeable future, and OptaSense employees will remain within the company, which has offices in the UK, Dubai, the USA and Canada.

Terms of the deal

Luna is acquiring OptaSense for £29 million, which required approximately $40 million in cash. The transaction was funded using roughly $20 million of Luna’s existing cash and $20 million in debt (the source for which is discussed in a separate Luna press release issued simultaneously on 3rd December.

Luna also took the opportunity of these announcements to reaffirm its full-year 2020 guidance: total revenues expected to be $81M to $83M; and adjusted EBITDA of $10M to $12M.

The company concluded by stating it expects to provide “an additional outlook as well as additional qualitative detail on its fourth quarter and year-end 2020 earnings call, the date for which will be announced early in 2021.”