Abingdon, England--Oxford Instruments (OXIG:LSE) has acquired Asylum Research (Santa Barbara, CA), a maker of scanning probe microscopes (SPM) with subsidiaries in the UK, Germany, and Taiwan. Its products are used by academic and industrial customers across the world for a wide range of materials and bioscience applications.
Asylum Research is being acquired from its management for an initial debt free, cash free consideration of $32 million with a deferred element of up to $48 million payable over three years depending on performance. Asylum Research generated Earnings Before Interest and Taxation (EBIT) of $1.1 million in 2011 from revenue of $19.6 million, and had gross assets of $6.2 million. The acquisition will be funded from existing facilities and is expected to be completed before the end of December 2012.
The acquisition of Asylum Research is in line with Oxford Instruments’ 14 Cubed objectives, to achieve a 14% average compound annual growth rate in revenues and a 14% return on sales by the year ending March 2014. This acquisition contributes to the planned acquisition element of the revenue growth objective. While Asylum Research is expected to deliver less than the 14% targeted margin in this and the next financial year, following the acquisition the 14 Cubed margin target for the Group remains unchanged.
Approximately 60% of Asylum Research turnover comes from customers working in the materials science area where the customer base and routes to market are shared with Oxford Instruments. This opens opportunities for market synergies and the development of new integrated products. The remainder of Asylum Research’s turnover is in the bio-nano area where SPM instruments are used for research into soft materials such as DNA. This market provides a new growth opportunity for Oxford Instruments.
Jonathan Flint, Chief Executive of Oxford Instruments, noted, "The acquisition of Asylum Research significantly increases our footprint in the nanotechnology space and complements our strong position in electron microscopes with a presence in another fundamental nanotechnology measurement technique. The acquisition also gives us access to the rapidly growing bio-nano market as it allows customers to perform analysis of organic samples in their natural liquid environments, something which cannot readily be done using electron microscopes.