Precision Optics acquires Lighthouse Imaging in $2.9M cash and share deal

07 Oct 2021

Deal combines two medical optics and digital imaging systems developers that are “poised for growth.”

Precision Optics, a developer of advanced optical instruments for the medical and defense industries, has announced the acquisition of Lighthouse Imaging, a private equity held company based in Windham, Maine.

Lighthouse Imaging manufactures optical imaging electronics and offers systems engineering capabilities to medical device companies developing new applications.

Dr. Joe Forkey, President and CEO of Precision Optics, commented, “Now is an exciting time for the companies, our employees, customers and shareholders as we bring together two of the medical industry’s leaders in imaging systems.

“This combination will accelerate the growth both of our companies have experienced in this market, as we increase our ability to assist our customers in developing next generation applications which are helping to change the future of healthcare.”

Founded in the late 1980s, Lighthouse Imaging in recent years has transitioned its business model to leverage its optical imaging electronics and systems engineering capabilities to assist medical device companies developing next generation applications.

‘Opportunities for growth’

Lighthouse Imaging had revenues of $4.5 million and pre-tax earnings of of $232,000 for the year to June, 2021. Two-thirds of its revenue were attributable to engineering services, and the remainder to production activities.

In the acquisition announcement, the companies comment that “up to four new projects should transition from engineering to production in the coming year, providing opportunities for significant growth going forward. Additionally, Lighthouse Imaging has a robust and expanding project pipeline.”

Lighthouse Imaging was most recently owned by Anania & Associates Investment Company, a private equity firm focusing on Maine-based companies. Peter V. Anania, its president and chairman, will join Precision Optics' board of directors. Lighthouse Imaging's management team, including CEO Tom Snyder, CCO Robert Austring, and CTO Benjamin Gray, have agreed to continue with the combined company.

Snyder commented, “On behalf of Lighthouse owners and employees, I want to convey our excitement about merging these two industry leading companies. Thanks to a strong team and excellent partnerships with our customers, Lighthouse is poised for organic growth.

“We have a strong project portfolio and expect multiple products to transfer to manufacturing over the next 6-12 months. We have also been exploring investments in our business. The merger provides many of the benefits we were looking to acquire. Together, Lighthouse and Precision Optics are better positioned to address a robust medical imaging market and drive additional growth.”

Financial details

The total purchase price is $2.85 million in cash along with 2.5 million shares of Precision Optics. Potential additional payments up to $1.5 million are subject to certain earnout provisions to be evaluated over the next two years. Precision Optics completed an equity capital raise of $1.5 million at a per share price of $1.60 concurrent with the closing of the acquisition and entered into a $2.6 million term loan with Main Street Bank of Marlborough, Massachusetts.

Forkey added, “We expect this acquisition will be accretive to Precision Optics' profitability per share. Our ability to utilize available bank financing marks a new chapter for our company and we will continue to look to build capabilities and scale operations to take advantage of robust healthcare and defense markets.”