PHOTONICS & ADVANCED TECH MARKET EXPERTISE
Our deep industry experience in the Photonics market and relationships with Strategic Buyers and their Private Equity partners investing in the Photonics sector enable us to provide critical guidance to privately held and family-owned companies participating in this sector.
Companies employing photonics and advanced technologies serve a wide range of markets – from life sciences to consumer electronics to lasers to optics.
Next Point has experience facilitating transactions in this space, leading to an understanding of the strengths and challenges experienced by these companies.
Photonics M&A Landscape
The Photonics market is highly fragmented, with thousands of small to medium-sized participants. The industry has experienced a flood of industry consolidation over the past few years, totaling $85 billion in 2021, just short of 2019’s high point of $87 billion.
Strategic Buyers account for 80% of transactions in the Photonics industry. Strategic Buyers are looking for increased scale to strengthen their core business.
Additional motivations include opening new markets, enhancing capabilities, implementing new and innovative business plans, and bringing critical applications in-house with vertical acquisitions.
Next Point focuses on selling smaller participants to larger Strategic Buyers, often backed by Private Equity funding. We have advised on successful transactions in this market and have developed connections with both Strategic Buyers and Private Equity investors in this industry.
- Complete lens systems, visible, IR and UV
- Laser Manufacturing
- Biological and Chemical Sensing
- Medical Diagnostics and Therapy
- Life Sciences and Biophotonics
- Long range IR and thermal surveillance
- Projection systems
- Display technology
- Optical Computing
- 3D Printing
- Consumer Electronics
A Focused Success Story
Located in Rochester, NY – the birthplace of the Photonics industry – our client provided exact, critical product functions, mechanical components, and assemblies to OEMs in the photonics/optical market with near-zero defects.
Photonic devices are components for creating, manipulating, or detecting light. The Company produced components to hold the necessary lenses. These parts require a very high level of precision and complexity. An understanding of the functionality of a system, its components, and how they interact is vital to being a reliable manufacturer in the photonics/optical marketplace.
The Company understood the needs of its customers, including the function of spacers, retainers, AR threads, and air spacing.
The second generation of ownership had reached retirement age and engaged Next Point to search for a strategic buyer.
Next Point employed its proven Divestiture Process that begins with developing a Confidential Information Memorandum (CIM). The CIM includes financial data, sales, marketing, organizational and facilities information, graphics, and photos compiled in a professional deck for introductory presentations to potential buyers. The CIM is a crucial piece that helps the prospective buyer understand the business opportunity presented by the strategic acquisition.
We also created a ‘blind’ teaser to introduce the opportunity to potentially interested buyers without identifying the Company.
The Marketing phase of this project launched on February 10, 2023. The blind teaser and NDA were distributed to our extensive database to cast a wide net of opportunity. Simultaneously, we employed concentrated marketing efforts on targeted strategic buyers, including direct phone calls, emails, and mailed letters.
The project generated over 40 signed NDAs and CIMs delivered. The successful buyer asked follow-up questions and scheduled a conference call with the ownership soon after receiving the CIM. The Private Equity Firm wanted to move swiftly and quickly made an enticing initial offer for the Company.
The LOI was submitted on February 24, 2023. After reviewing the LOI in detail with our clients, Next Point proposed a counter-offer agreeable to the buyer, and the LOI was executed on March 13, 2023, effectively pausing our conversations with other potential buyers after only 17 days on the market.
Next Point utilized the CapLinked platform, allowing parties to upload and download required due diligence documents directly. The due diligence process and stock transaction documents took three months to complete, and the transaction closed on June 2, 2023. A total of 111 days from the marketing launch to closing.
The Turning Point
Next Point’s process is designed to generate multiple offers for our clients to compare. Still, once in a while, the first offer is sufficiently enticing to preempt the entire process because it meets or exceeds our client’s transaction goals.
Let’s talk about how we can help you, what we can do, and your goals for your company.
Our Photonics Team
We run a very time-sensitive and disciplined M&A process that aims to maintain confidentiality. We seek to keep things simple and practical as we work to develop clarity and focus for our clients as they navigate through a transaction.
J. Michael Grady
"All great business leaders understand that success is a journey, not a destination. A vital part of that voyage includes thought and planning on the exit strategy. Whether it is on the near horizon or a future objective, having the assistance from ones that have traveled the same road is a great benefit and comfort."
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Originally from Ohio, Michael’s business journey started with roles in design and manufacturing Engineering for a Fortune 500 company in the Rochester area. This was followed by a partnership in a multi-person sales and marketing firm covering the entire East coast for numerous mechanical manufacturing technologies.
Over the past 22 years, his involvement has been in the optical marketplace. He was the owner and CEO of the most recognized mechanical component supplier to the photonics industry. Michael successfully navigated and concluded the sale of his company to a private equity firm. This firsthand experience in successfully exiting his own company positions him well to guide and support other business owners through the complexities of the exit process.
Michael’s area of focus at Next Point is on the high-tech industry which includes Optics and Photonics, Aerospace and related upper-level technologies. His emphasis is on client preparedness and exit assistance from the vantage point of a former business owner.
"Successful ownership transition requires careful planning and professional execution. Understanding the business owner's goals is the first step to discovering the best approach to the solution that will deliver the best results."
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Jui is part of the Merger & Acquisition and Advisory teams at Next Point, leading the firm’s Rochester, NY office. Her area of focus includes mergers and acquisitions, value enhancement strategies to increase enterprise value and strategic exit plans for small and middle market business owners.
She uses her more than 18 years of broad-based entrepreneurial and advisory experience to provide practical advice to help clients grow the value of their businesses and sell it for the maximum return. Her prior experience also includes working with fortune 100 companies in various financial planning and joint venture management roles, emphasizing financial analysis, business modeling and risk management.
"Sometimes owners just need another set of eyes."
Phone: 716.847.1485 ext. 0
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