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Interview With Laser Photonics Principal Financial Officer, Carlos Sardinas, Discussing Recently Announced Control Micro Systems Transaction

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Laser Photonics (NASDAQ: LASE) announced the acquisition of Control Micro Systems (CMS) assets for $1.05 million, consisting of $950,000 in cash and $100,000 in stock. CMS specializes in laser solutions for pharmaceutical drug delivery, particularly in controlled-release tablet production and packaging compliance. The acquisition includes over $2 million in unbilled contracted revenue and brings several top global pharmaceutical manufacturers as customers. According to management, CMS generated more revenue than LPC in 2023 despite being under-invested due to previous financial challenges. LPC plans to leverage its sales and marketing expertise to grow the acquired business in the pharmaceutical sector, which has an 11% CAGR through 2030.

Laser Photonics (NASDAQ: LASE) ha annunciato l'acquisizione degli asset di Control Micro Systems (CMS) per 1,05 milioni di dollari, dei quali 950.000 dollari in contanti e 100.000 dollari in azioni. CMS si specializza in soluzioni laser per la somministrazione di farmaci farmaceutici, in particolare nella produzione di compresse a rilascio controllato e nella conformità dell'imballaggio. L'acquisizione include oltre 2 milioni di dollari in ricavi contrattuali non fatturati e porta come clienti diversi dei principali produttori farmaceutici globali. Secondo la direzione, CMS ha generato più entrate di LPC nel 2023 nonostante sia stata sotto-investita a causa delle precedenti difficoltà finanziarie. LPC prevede di sfruttare la propria expertise in vendite e marketing per far crescere l'attività acquisita nel settore farmaceutico, che ha un CAGR dell'11% fino al 2030.

Laser Photonics (NASDAQ: LASE) anunció la adquisición de activos de Control Micro Systems (CMS) por 1,05 millones de dólares, que consisten en 950.000 dólares en efectivo y 100.000 dólares en acciones. CMS se especializa en soluciones láser para la entrega de medicamentos farmacéuticos, particularmente en la producción de tabletas de liberación controlada y en la conformidad del empaque. La adquisición incluye más de 2 millones de dólares en ingresos contratados no facturados y trae varios de los principales fabricantes farmacéuticos globales como clientes. Según la dirección, CMS generó más ingresos que LPC en 2023 a pesar de estar subinvertido debido a desafíos financieros anteriores. LPC planea aprovechar su experiencia en ventas y marketing para hacer crecer el negocio adquirido en el sector farmacéutico, que tiene un CAGR del 11% hasta 2030.

레이저 포토닉스 (NASDAQ: LASE)는 Control Micro Systems (CMS)의 자산을 105만 달러에 인수했다고 발표했습니다. 이 금액은 95만 달러의 현금과 10만 달러의 주식으로 구성되어 있습니다. CMS는 제약 약물 전달을 위한 레이저 솔루션을 전문으로 하며, 특히 조절 방출 정제 생산 및 포장 준수에 중점을 두고 있습니다. 이번 인수는 200만 달러 이상의 미청구 계약 수익을 포함하며, 여러 주요 글로벌 제약 제조업체들을 고객으로 유치합니다. 경영진에 따르면, CMS는 2023년에 LPC보다 더 많은 수익을 올렸지만, 이전의 재정적 어려움으로 인해 투자가 부족했습니다. LPC는 제약 부문에서 인수한 사업을 성장시키기 위해 판매 및 마케팅 전문성을 활용할 계획입니다. 이 부문은 2030년까지 11%의 CAGR을 기록할 것으로 예상됩니다.

Laser Photonics (NASDAQ: LASE) a annoncé l'acquisition des actifs de Control Micro Systems (CMS) pour 1,05 million de dollars, se composant de 950 000 dollars en espèces et de 100 000 dollars en actions. CMS se spécialise dans des solutions laser pour l'administration de médicaments pharmaceutiques, en particulier dans la production de comprimés à libération contrôlée et la conformité de l'emballage. L'acquisition inclut plus de 2 millions de dollars de revenus contractuels non facturés et apporte plusieurs des principaux fabricants pharmaceutiques mondiaux en tant que clients. Selon la direction, CMS a généré plus de revenus que LPC en 2023 malgré un manque d'investissement dû à des défis financiers antérieurs. LPC prévoit de tirer parti de son expertise en ventes et en marketing pour développer l'activité acquise dans le secteur pharmaceutique, qui aura un taux de croissance annuel composé de 11 % jusqu'en 2030.

Laser Photonics (NASDAQ: LASE) gab die Übernahme von Vermögenswerten der Control Micro Systems (CMS) für 1,05 Millionen US-Dollar bekannt, die sich aus 950.000 US-Dollar in bar und 100.000 US-Dollar in Aktien zusammensetzen. CMS spezialisiert sich auf Laserlösungen für die pharmazeutische Arzneimittelabgabe, insbesondere in der Produktion von Tabletten mit kontrollierter Freisetzung und der Einhaltung von Verpackungsrichtlinien. Die Übernahme umfasst über 2 Millionen US-Dollar an nicht in Rechnung gestellten Vertragsumsätzen und bringt mehrere führende globale Pharmahersteller als Kunden mit sich. Laut dem Management hat CMS im Jahr 2023 mehr Umsatz als LPC generiert, obwohl es aufgrund vorheriger finanzieller Herausforderungen unterinvestiert war. LPC plant, seine Vertriebs- und Marketingexpertise zu nutzen, um das übernommene Geschäft im Pharmasektor auszubauen, der bis 2030 eine CAGR von 11% hat.

Positive
  • Acquisition price of $1.05M includes over $2M in unbilled contracted revenue
  • CMS generated higher revenue than LPC in 2023 (unaudited)
  • Expansion into recession-resistant pharmaceutical industry
  • Customer base includes several top 20 global pharmaceutical manufacturers
  • Target market (controlled-release pharmaceuticals) valued at $49.5B with 11% CAGR through 2030
Negative
  • Acquired assets were reportedly under-invested and neglected
  • Integration risks with new employees and business segment
  • Cash outlay of $950,000 for acquisition

Insights

The acquisition of Control Micro Systems (CMS) by Laser Photonics (LPC) for $1.05 million appears to be a strategic bargain. CMS generated more revenue than LPC in 2023 and comes with $2 million in unbilled contracted revenue. The deal provides entry into the pharmaceutical laser systems market, valued at $49.5 billion with a 11% CAGR through 2030. The low purchase price relative to potential revenue and market opportunity, combined with existing top pharma client relationships and recession-resistant characteristics, suggests significant upside potential. However, the challenge lies in successfully integrating and scaling the underperforming assets while maintaining quality service to major pharmaceutical clients.

The acquisition positions LPC in the specialized pharmaceutical manufacturing equipment sector, specifically in controlled-release drug delivery systems. The laser drilling technology for creating microscopic apertures in tablets represents a critical component in modern drug delivery systems. Having established relationships with top-20 global pharmaceutical manufacturers provides strong validation of the technology's value proposition. The pharma industry's high regulatory barriers and quality requirements typically result in long-term customer relationships once established, suggesting stable recurring revenue potential if properly managed.

The Company announced the signing of the asset purchase agreement on 10/31/24

ORLANDO, Fla.--(BUSINESS WIRE)-- Laser Photonics Corporation (LPC) (NASDAQ: LASE), a leading global developer of industrial laser systems for cleaning and other material processing applications, today shared an interview with Carlos Sardinas, VP of Finance for LPC, where he speaks on the Company’s recently announced acquisition of the assets of Control Micro Systems, Inc. (CMS). Key messages from the interview included:

  • LPC is diversifying into a new, recession-resistant vertical with attractive growth characteristics;
  • Due to financial challenges, the prior owner under-invested in the business, particularly sales and marketing, and therefore, LPC believes CMS’ products were under-monetized as well;
  • CMS counts several of the top 20 largest global pharmaceutical manufacturers as customers;
  • LPC will combine the engineering and customer support talent previously employed by CMS and LPC’s existing sales and marketing programs with the goal of creating substantial synergies.

See below for a full transcript of the interview:

1. Please explain to investors what CMS does.

Sardinas: CMS specializes in developing custom precision laser solutions for several markets; however, the business that was especially attractive to us was their laser solutions for the healthcare industry, specifically pharmaceutical drug delivery, where they address two very attractive applications: controlled-release tablet production and packaging compliance. With its laser drilling systems, CMS has established itself as a critical supplier for laser systems that create microscopic apertures in tablets, allowing for precise control over drug release rates.

2. Why were these assets especially attractive to LPC from a business, technology and market perspective?

Sardinas: There are several reasons. First, this is a huge, growing industry. According to Grandview Research, the broader market for controlled-release pharmaceuticals was $49.5 billion in 2023 and is expected to grow at a CAGR of nearly 11% through 2030. While the market for CMS’ laser systems that create precise holes in the pharmaceuticals is a tiny fraction of this market, this shows that the demand for these drug delivery methods will continue to grow, and we believe CMS is well-positioned to capture this growth.

Second, not only does this diversify our business into a new growth market, but pharmaceuticals tend to be a recession-proof, or at least highly recession-resistant industry, so we don’t expect to see much cyclicality.

The third is synergies. We believe these assets were significantly under-monetized and had become neglected after being acquired in 2022. The acquiring Company was saddled with debt and did not invest in growth initiatives like sales and marketing due to its debt load. Despite this, CMS generated more revenue (unaudited) than LPC did in 2023. We believe with the proper investment in sales and marketing programs, an area of strength for LPC, we can accelerate growth.

Finally, we see additional benefits as we acquired existing customer programs with over $2 million in unbilled contracted revenue that we can now turn into cash flow to reinvest in the business. Also, while not technically part of the deal, we hired most of the former CMS employees, who bring engineering and customer support talent to LPC.

3. Who are CMS’ previous major customers?

Sardinas: CMS has several of the top 20 largest global pharmaceutical manufacturers as its customers, including 2 in the top 10. As we invest in sales and marketing, we hope to penetrate these customers further while expanding this list in the coming years.

4. What was the purchase price for the acquisition of CMS?

Sardinas: We paid $1.05 million for the assets consisting of $950,000 in cash and $100,000 in LPC stock.

5. Finally, what are the next steps following the acquisition?

Sardinas: Laser Photonics is set to close the asset purchase agreement over the next week. As we attain control of the assets and develop our game plan, we will provide investors with relevant updates. Thank you.

About Laser Photonics Corporation

Laser Photonics is a vertically integrated manufacturer and R&D Center of Excellence for industrial laser technologies and systems. Laser Photonics seeks to disrupt the $46 billion, centuries-old sand and abrasives blasting markets, focusing on surface cleaning, rust removal, corrosion control, de-painting and other laser-based industrial applications. Laser Photonics’ new generation of leading-edge laser blasting technologies and equipment also addresses the numerous health, safety, environmental and regulatory issues associated with old methods. As a result, Laser Photonics has quickly gained a reputation as a leader in industrial laser systems with a brand that stands for quality, technology and product innovation. Currently, world-renowned and Fortune 1000 manufacturers in the aerospace, automotive, defense, energy, maritime, nuclear, and space industries are using Laser Photonics’ unique-to-industry systems. For more information, visit https://www.laserphotonics.com.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable securities laws. These statements are based on current expectations as of the date of this press release and involve risks and uncertainties that may cause results and uses of proceeds to differ materially from those indicated by these forward-looking statements. We encourage readers to review the “Risk Factors” in our Registration Statement for a comprehensive understanding. Laser Photonics Corp. undertakes no obligation to revise or update any forward-looking statements, except as required by applicable laws or regulations, to reflect events or circumstances after the date of this press release.

Investor Relations Contact:

Brian Siegel, IRC, MBA

Senior Managing Director

Hayden IR (346) 396-8696

laser@haydenir.com

Source: Laser Photonics Corporation

FAQ

What is the acquisition price for Control Micro Systems by Laser Photonics (LASE)?

Laser Photonics (LASE) is acquiring Control Micro Systems' assets for $1.05 million, consisting of $950,000 in cash and $100,000 in LPC stock.

How much unbilled contracted revenue does CMS bring to LASE?

The acquisition includes over $2 million in unbilled contracted revenue from existing customer programs.

What is the market size and growth rate for controlled-release pharmaceuticals that LASE is entering?

According to Grandview Research, the controlled-release pharmaceuticals market was $49.5 billion in 2023 and is expected to grow at a CAGR of nearly 11% through 2030.

Who are the main customers of Control Micro Systems being acquired by LASE?

CMS's customers include several of the top 20 largest global pharmaceutical manufacturers, including 2 in the top 10.

Laser Photonics Corporation

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