Bruker (BRKR) Unit, Oxford Instruments Acquire Oxford Instruments Superconducting
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Oxford Instruments plc and Bruker Energy and Supercon Technologies, Inc. (BEST), a subsidiary of Bruker Corporation (NASDAQ: BRKR), announced that they have closed the acquisition of Oxford Instruments Superconducting Wire LLC (OST), based in Carteret, New Jersey, by BEST for a total consideration of 17.5 million US dollars in cash.
In the transaction, BEST has acquired all shares of OST from Oxford Instruments. The OST business will be part of BEST's advanced superconducting materials business, and one of two major development and production sites for low-temperature superconductors (LTS). BEST plans to optimize the OST portfolio, and integrate the OST operations into optimized BEST processes in order to continue the OST operations in New Jersey at enhanced productivity, quality and profitability levels. The acquisition of OST will expand BEST's technology portfolio with OST's unique Rod Restack Process (RRP) conductor portfolio, which is already being used by leading international fusion and high-energy physics projects that require highest magnetic fields.
Superconducting wires are used primarily in healthcare and scientific instrumentation, e.g. for magnetic resonance imaging (MRI) and nuclear magnetic resonance (NMR) magnets, as well as for high-energy physics and fusion, accelerator, confinement and detector magnets in 'big science' projects.
BEST has experienced significant growth in the LTS market for several years, following major capacity, automation and quality control investments. The acquisition of OST will enhance BEST's capabilities along the entire production chain with the goal to provide even higher performance, quality and delivery flexibility to its LTS customers. With the acquisition of OST, BEST has emerged as a world leading LTS provider with the broadest technology and product portfolio, the highest productivity, and industry-leading conductor performance and quality. BEST also has an emerging, high-temperature superconductivity (HTS) business, optimized for ultra-high field magnet applications, and based on 2nd generation HTS tape technology.
Oxford Instruments has recognized the ongoing challenges within the superconducting wire markets due primarily to pricing pressures exerted by the MRI system manufacturers and the need for larger scale operations in order to address this. After a comprehensive review of OST, Oxford Instruments has determined it no longer fits with the Group's long-term strategic vision. The decision to sell this business to BEST will allow OST to continue to provide customers with the performance and quality expected of them.
Ian Barkshire, Chief Executive Oxford Instruments, commented: "OST remains a high quality business; its acquisition by BEST will allow the realization of synergies of scale for both organizations. The business will be better positioned to ensure the ongoing success in this market and the high quality of care for employees and customers that OST is well known for."
Dr. Burkhard Prause, President and CEO of BEST, explained: "This is a clearly synergistic acquisition for BEST that expands our LTS capacity, our reach into the US market and into China, as well as into the superconductivity and magnet research community. It will allow BEST to better serve our global customers with improved response times, accelerated innovation, higher flexibility and more localized content. Our MRI OEM customers have accelerated their own innovation cycles and expect critical partners to keep up with their magnet developments. This acquisition will allow BEST and OST to improve our cost, productivity and margin position over time, in order to offer highest performance, quality and optimized total cost of ownership to our customers. OST has tremendous experience and great products, and we welcome our new colleagues to our team."
During the six month period ending September 30, 2016, OST had revenues of 19.1 million British Pounds (GBP) and operating profit of 1.1 million British Pounds (GBP). Bruker does not anticipate the acquisition to have a significant impact on Bruker's full year 2016 projected sales, operating margin expansion and non-GAAP EPS outlook.
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