Laser Photonics Completes Acquisition of Control Micro Systems - Expands Into Pharmaceutical Laser Equipment Market

Rhea-AI Summary

Laser Photonics (NASDAQ: LASE) has completed the acquisition of Control Micro Systems (CMS) for approximately $1 million, funded through cash from a recent capital raise and stock. CMS, acquired through bankruptcy proceedings, brings $4 million in existing program orders and specializes in laser systems for pharmaceutical applications, particularly in slow-release tablets and counterfeit-proof pill manufacturing. The acquisition strengthens LPC's position in the global laser market and provides entry into the pharmaceutical equipment sector. LPC has retained all CMS employees to ensure business continuity and maintain service for existing customers, which include several top 20 global life sciences companies.

Positive

• Acquisition brings $4 million in existing program orders
• Entry into recession-resistant pharmaceutical equipment sector
• Strategic acquisition at favorable price ($1M) due to bankruptcy proceedings
• Expansion of customer base to include top 20 global life sciences companies
• Retention of all CMS employees ensuring business continuity

Negative

• Additional cash expenditure and stock dilution from acquisition
• Integration risks from acquiring assets from bankruptcy proceedings

Insights

Financial Analyst

This strategic acquisition represents a significant value proposition for LPC. At $1 million purchase price for assets generating $4 million in program orders, the deal appears highly accretive. The pharmaceutical industry entry is particularly noteworthy, offering recession-resistant revenue streams and high barriers to entry. CMS's existing relationships with top 20 global life sciences companies provide immediate credibility and revenue potential.

The transaction structure, leveraging both cash from recent funding and stock, maintains financial flexibility while minimizing dilution. The distressed sale scenario (Chapter 11) enabled LPC to acquire valuable assets at a significant discount to their potential market value. The retention of CMS employees should ensure operational continuity and customer relationships preservation.

Market Research Analyst

The pharmaceutical laser equipment market entry marks a pivotal diversification for LPC. The sector's focus on slow-release tablets and anti-counterfeiting solutions represents high-margin, specialized applications with sustained demand growth. Key advantages include:

• Established revenue stream from existing pharma clients
• Protected market position due to regulatory barriers
• Cross-selling opportunities with LPC's existing product portfolio

Integration with LPC's sales infrastructure could accelerate CMS's market penetration, while the "Made in USA" positioning provides a competitive edge against foreign competitors.

CMS develops specialized laser systems critical for slow-release tablets and counterfeit proof pill manufacturing in the pharmaceutical industry

CMS brings existing program orders of $4 million to LPC

CMS counts several top 20 global life sciences companies as customers

ORLANDO, Fla.--(BUSINESS WIRE)-- Laser Photonics Corporation (“LPC” or the “Company”) (NASDAQ: LASE), a global leader in industrial laser systems for cleaning and material processing applications, today announced the closing of its acquisition of Control Micro Systems, Inc. (CMS). This transformative acquisition strengthens LPC's footprint in the global laser market and directly opens the door to the high-demand pharmaceutical equipment sector known for its growth and stability.

Wayne Tupuola, CEO of LPC commented:

“We’re excited to welcome CMS and its talented team into the LPC family. CMS is well-regarded for its U.S.-designed and manufactured laser solutions that offer precision and speed, and we share a vision of advancing high-quality laser systems across various industries. This acquisition is particularly significant as the pharmaceutical market, with its stringent quality standards and demand for technologies like slow-release tablet production and anti-counterfeiting, provides both a recession-resistant opportunity and high barriers to foreign entry. Combining our expertise, we believe we are well-positioned to deliver high-performance tools to clients worldwide who demand the best in safety, sustainability and material processing.”

LPC acquired CMS’ assets through an asset purchase agreement for approximately $1 million, primarily funded by cash from a recent capital raise and stock. The acquisition was made possible through divestments by CMS’ parent company as part of its Chapter 11 bankruptcy proceedings. LPC ensured a smooth transition by offering positions to all CMS employees, providing stability and continued service for CMS’ valued customers and vendors.

Tupuola added, “We believe the value we obtained from this acquisition was substantial, as the assets were under-monetized due to its former parent company’s over-leveraged financial position. Over the coming years, we see a tremendous opportunity to unlock CMS’s growth potential by integrating it into our existing sales and marketing infrastructure, enhancing customer engagement and expanding our market reach to maximize wallet share from current customers and bring new clients on board.”

Reflecting on the strategic importance of the acquisition, Carlos Sardinas, VP of Finance at LPC, emphasized in an interview that CMS’ strong foothold in the pharmaceutical sector, alongside its advanced laser systems for controlled-release medications, positions LPC to further expand in the life sciences industry. CMS clients include some of the world’s largest pharmaceutical companies, underscoring this acquisition's value to LPC’s portfolio and growth strategy.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241106779285/en/

Investor Relations Contact:

Brian Siegel, IRC, MBA

Senior Managing Director

Hayden IR

(346) 396-8696

laser@haydenir.com

Source: Laser Photonics Corporation

FAQ

How much did Laser Photonics (LASE) pay for Control Micro Systems?

Laser Photonics acquired Control Micro Systems for approximately $1 million, funded through a combination of cash from a recent capital raise and stock.

What existing orders does CMS bring to Laser Photonics (LASE)?

Control Micro Systems brings existing program orders worth $4 million to Laser Photonics

What market segment does the CMS acquisition open up for LASE?

The acquisition gives Laser Photonics entry into the pharmaceutical equipment sector, specifically for slow-release tablets and counterfeit-proof pill manufacturing.

How did Laser Photonics (LASE) handle CMS employees after the acquisition?

Laser Photonics offered positions to all CMS employees to ensure a smooth transition and maintain service continuity for customers and vendors.