Ceramics manufacturer Ceradyne (NASDAQ:CRDN) has entered into an agreement to acquire specialty glass manufacturer VIOX Corp for up to US$49 million.
Seattle, Washington based VIOX will be acquired for US$27 million in cash now, plus up to $22 million based on certain sales and earnings targets over a 30 month period following the closing of the acquisition.
Ceradyne expects the acquisition to be immediately earnings accretive. In the 12 month period ended September 30th, 2010, VIOX generated sales of approximately $22 million, and had “strong” operating margins.
VIOX develops, manufactures and markets specialty glass compositions for a wide range of electronic, industrial and health care markets. Specialty glass is often considered a subset of technical ceramics, hence the logic in Ceradyne’s interest.
VIOX will be incorporated into the Ceradyne’s Advanced Ceramic Operations segment.
“In recent years, VIOX developed a specialty glass formulation for polycrystalline silicon photovoltaic solar applications. VIOX customers add electrically conducting powdered metals such as silver or aluminum to the VIOX powdered specialty glass. When applied by the solar cell manufacturer in thin bands to the solar wafer, they act as an extremely efficient conduit to transport the electrons from the solar wafer to the connection box,” Ceradyne explained.
“ This development has led to rapid recent growth in VIOX sales. Solar glass products now account for almost 70% of VIOX sales. Many of the ultimate solar users of VIOX glass are also Ceradyne's customers for its high purity ceramic solar crucibles. “
VIOX also produces bio-active glasses for the healthcare industry, which has demonstrated an ability to react with and promote human bone growth.
“It is our intention to provide the resources to VIOX that will allow them to take advantage of market opportunities much faster and more efficiently than the 'pre-acquisition' smaller VIOX could have achieved. Perhaps as important," David Reed, Ceradyne Vice President, commented.