Advanced Photonix Inc (API) of Ann Arbor, MI, USA (which designs and makes APD, PIN, and FILTRODE photodetectors, HSOR high-speed optical receivers, and T-Ray terahertz instrumentation) and Luna Innovations Inc of Roanoke, VA, USA (which manufactures fiber-optic sensing and test & measurement products for the telecoms, aerospace, automotive, energy and defense markets) have agreed to merge.
API stockholders will receive shares of Luna common stock at a ratio of 0.31782 for each share of API common stock owned by them. After mailing existing stockholders with a joint proxy statement/prospectus - filed with the US Securities and Exchange Commission (SEC) - API and Luna will each hold stockholder meetings for approval of the merger and issuance of Luna stock, respectively.
It is reckoned that the combined firm will provide greater capability across a broader market base, with a strong balance sheet and potential operating synergies. The merged company will have pro forma combined revenue for the 12 months to end-September 2014 of about $49.9m ($29.9m for API and $20m for Luna). The cost savings resulting from a single public company infrastructure should better position it for improved profitability, it is added. The combined firm will also have significant intellectual property protection for the technologies in its product portfolio, with over 200 patents and patent applications.
The combined company will have a foundation from API's High Speed Optical Receiver (HSOR) and Optosolutions product lines and Luna's core test & measurement products, enabling continued investment in the growth of areas such as Luna's strain & temperature sensing business and API's next generation of receivers and detectors. Additionally, the plan is to continue developing a pipeline of technologies for future commercialization in Luna's Technology Development Division and API's Terahertz operations. "The combined product lines will strengthen the merged company's position in the marketplace by offering more for each customer," says API's president & CEO Richard Kurtz.
"This merger will enable us to provide even greater capability across a broadened market base, providing improved opportunity for growth," says Luna's president & CEO My Chung. "Joining forces with a company like API will help us accelerate our path to profitability," he adds. "We're creating a significantly stronger company through the combination of Luna's proven technology with API's components and subsystems," comments Luna's chairman Richard Roedel.
The combined company will keep the Luna name and be headquartered in Roanoke, with My Chung remaining as CEO and a member of the board of directors. The board will be expanded to seven: the CEO plus six independent directors consisting of three designated by Luna's board (Richard W. Roedel as chairman, John B. Williamson III and Michael W. Wise - all from Luna's board) and three designated by API's board (API's non-executive chairman Donald Pastor plus Gary J. Spiegel and Ed J. Coringrato Jr). Spiegel and Coringrato (who have no prior association with API) formerly served as senior VP of Newport Corp and CEO of CyOptics Inc, respectively.