OPINION: M&A
11.2 for the healthcare industry. And for deals in photonics-enabled markets, the average valuation multiple is even larger, at 16.3.
A trend following the economic recovery Photonics companies, like all high-tech companies, are characterised by their continual need to innovate in the face of strong competition and rapid product obsolescence.
An established firm can enter a new product market through acquisition or internal development. R&D is used within firms to create new products and growth opportunities. But they also rely on M&A as a mean of expediting shifts in their operations and portfolios.
After the 2008-2009 market crash, companies mainly focused on the restoration of their turnover and margin. But, over the past years, as the economy gradually recovered, large companies began to use their cash to fill persistent gaps in their product lines or extend them in new directions. Of course, we can question this trend of
M&A: Is it going to continue? And what does it mean for the photonics industry?
It is clear that consolidation of the photonics industry will continue in the coming years
Further consolidation is needed to strengthen the highly fragmented photonics industry According to our analysis, it is clear that consolidation of the photonics industry will continue in the coming years. In fact, as highlighted by the above examples, photonics is entering major vertical markets like healthcare, transportation, and food and beverage. These vertical markets are often capital- intensive. But, the photonics industry is still highly fragmented.
SPIE conducted a study on 2,750 companies worldwide
supplying photonics components and materials. These companies sell US$156 billion worth of products. Of these companies, more than 2,000 realise revenues of less than US$10 million, accounting for less than four per cent of the total sales (see figure 1). Furthermore, if we look at the various M&A during the last years, we see that the most
important motivations are the following: l Complementing the product offer (NKT Photonics buying Fianium)
l Synching sales and manufacturing (Rofin acquiring Coherent),
l Expanding into adjacent markets (MKS Instruments purchasing Newport)
l Increasing product portfolio, know-how and strengthening IP (Necsel IP acquiring PD-LD)
l Moving up in the value chain (Corning buying Novasol)
l Strengthening the position in photonics markets (Hübner purchasing Cobolt) In fact, large firms will continue to acquire smaller companies producing highly differentiated products with strong IP, offering access to key customer segments or filling gaps in emerging technologies. On the other side, the targets are companies with technologies that can get more value with the commercial channels and working capital of big companies behind them. l
Tematys provides marketing expertise dedicated to photonic products and its application markets. User-needs can often be met by several photonic technologies. Tematys’ knowledge of use and ability of each photonic technique helps clients find the most effective solutions to their needs.
Innovative Stable Fast
User-friendly Compact I Robust
WWW.ADMESY.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48