IDEX Corporation today announced it has entered into a definitive agreement to acquire Iridian Spectral Technologies (“Iridian”) for cash consideration of 150 million Canadian dollars (“CAD”), subject to customary adjustments. The acquisition complements existing IDEX optical coating expertise, allowing IDEX to expand its core capabilities to support current and future markets.
Iridian is a global leader in designing and manufacturing thin-film, multi-layer optical filters serving the laser communications, telecommunications, and life sciences markets. The purchase is expected to close later this quarter, subject to customary closing conditions, at which point Iridian will join the businesses of IDEX Optical Technologies in IDEX’s Health & Science Technology segment. Iridian will also be a strong partner in the life science filters business driven by the Semrock team of IDEX Health & Science.
“This acquisition strongly supports our strategic growth plan,” IDEX Chief Executive Officer and President Eric Ashleman said. “It expands our talent, technology and product portfolio in optical filters, enabling us to better compete in our core markets, and expand into new markets that we believe will drive profitable growth.”
Iridian has proven expertise in optical filter design and production, providing support throughout a product’s lifecycle, from initial prototyping to high-volume manufacturing. They offer advanced, proprietary thin-film design deposition and manufacturing technology of durable, high-performance filter optics.
Iridian has a strong brand reputation and an established, loyal customer base, which complements the IDEX Optical Technology brands (CVI Laser Optics, CVI Infrared Optics, and Advanced Thin Films) along with the IDEX Health & Science, Semrock optical filters product line.
Privately held and based in Ottawa, Ontario, Canada, Iridian expects fiscal year 2023 sales of approximately CAD 36 million and EBITDA margin in the low 30s.
Use of Non-GAAP Financial Information
IDEX prepares its public financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). IDEX supplements certain GAAP financial performance metrics with non-GAAP financial performance metrics. Management believes these non-GAAP financial performance metrics provide investors with greater insight, transparency and a more comprehensive understanding of the financial information used by management in its financial and operational decision-making because certain of these non-GAAP metrics exclude items not reflective of ongoing operations. Non-GAAP financial performance metrics should not be considered a substitute for, nor superior to, the financial data prepared in accordance with GAAP. EBITDA is calculated as net income plus interest expense plus provision for income taxes plus depreciation and amortization. EBITDA margin is calculated as EBITDA divided by net sales.
IDEX has not provided a reconciliation of the expected EBITDA margin of Iridian for FY 2023 because we are unable to quantify certain amounts that would be required to be included in Iridian’s contribution to net income without unreasonable efforts. In addition, IDEX believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors.