March 11, 2005 Camarillo, CA -- Advanced Photonix (API), a global supplier of silicon-based optoelectronic platforms to OEMs, has signed a merger agreement to acquire Picometrix, a privately-held company located in Ann Arbor, Michigan. The transaction is anticipated to close in April, subject to customary closing conditions, including American Stock Exchange listing of API shares to be issued in connection with the transaction.
Picometrix is a developer and manufacturer of ultra high-speed photoreceivers for the telecommunication, data communication, and test/measurement markets, as well as terahertz instrumentation for the scientific, industrial, and defense/homeland security markets. The company's unaudited 2004 financial statements reflect revenues of $7.5 million (as compared to $3.5 million for the prior year), net income of $500,000 (as compared to a loss of $1.1 million in the prior year), long-term liabilities of approximately $7 million, and positive working capital of approximately $2 million as of December 31, 2004.
"Picometrix brings design experience and processing expertise in III-V semiconductor materials, namely Gallium Arsenide (GaAs) and Indium Phosphide (InP). These materials give API additional optoelectronic sensing capabilities and solutions to offer our target markets," explains Rick Kurtz, chairman and CEO of API. "The added benefit of Picometrix's proprietary Terahertz sensor technology supports our goal of building on our manufacturing capabilities."
"Picometrix provides world-class detector technology, specifically the highest performing 40Gb PIN detector and 10Gb APD available in the market," adds Paul Ludwig, president of API. "These technologies are excellent complements to our silicon-based detector offerings."
The purchase price is $3.5 million in cash, four-year API promissory notes in the aggregate principal amount of $2,900,500, and 2,575,000 shares of API Class A Common Stock. Upon the signing of the agreement, API agreed to provide a loan to Picometrix in the amount of approximately $4.2 million, the proceeds of which are to be used to prepay existing long-term indebtedness of Picometrix to a third party.
"As Picometrix, we endured the telecom restructuring and continued to make the necessary R&D investments, creating the most advanced receiver product offerings on the market," concludes Rob Risser, CEO of Picometrix. "We can now take advantage of API's sales and marketing capabilities to accelerate penetration in the recovering telecom sector and API's core markets."