GSI Group, Inc. (NYSE: GSIG) (the "Company," "we," "our," "GSI"), a global leader and supplier of precision photonics and motion control components and subsystems to the medical equipment and advanced industrial technology markets, today announced that it has sold its JK Lasers business to Trumpf GmbH + Co. KG, a leading global high-technology company, which produces machine tools, lasers and electronics for industrial applications, for approximately $31.5 million in cash, subject to customary purchase price adjustments.
JK Lasers is a leading developer and manufacturer of industrial lasers, including industrial fiber lasers that are used to perform cutting, welding, drilling, and additive manufacturing functions in material processing applications. The business is headquartered in Rugby, England and employs approximately 100 people worldwide.
"We decided to sell JK Lasers for an attractive valuation in order to redeploy the capital to invest in our growth strategies of building world class franchises in our core businesses, such as laser scanning and beam delivery, low power CO2 lasers, medical technologies and precision motion products," said John Roush, Chief Executive Officer of GSI Group Inc. "Our focus will be on both organic growth through differentiated new products, and acquisitions that improve our capabilities in target applications."
The divestiture is expected to improve GSI's adjusted gross profit margins by approximately 100 basis points. The JK Lasers business divestiture does not qualify for discontinued operations accounting treatment. However, the Company plans to provide non-GAAP reconciliations that will exclude the results of JK Lasers for both 2014 and 2015.
The JK Lasers business generated approximately $22 million in sales in 2014, but did not have a material impact to GSI's profitability in 2014. The Company expects to record a pre-tax gain on the sale of approximately $17 million to $20 million, and expects cash proceeds of roughly $26 million to $28 million, excluding tax and transaction-related costs. The Company does not expect the sale to have a material impact to its 2015 non-GAAP earnings per share from continuing operations or Adjusted EBITDA.
www.gsig.com
