Luna, Advanced Photonix to merge

Luna Innovations Inc. (NASDAQ: LUNA), maker of fiber-optic sensing and test and measurement products for the telecommunications, aerospace, automotive, energy, and defense markets, has agreed to a merger with Advanced Photonix, Inc. (NYSE MKT: API), which optoelectronic sensors, devices, and instrumentation for the telecommunications, defense, medical, and industrial markets.

API shareholders will receive 0.31782 shares of Luna common stock for each share of API common stock they own. The deal is contingent on the usual closing conditions as well as approval of both company's shareholders. The Rosen Law Firm says it is examining whether it should bring suit against API's board for not more widely shopping the company before agreeing to the merger with Luna.

The combined company, which will retain Luna's name and be headquartered in Roanoke, VA, will have pro forma combined revenue for the 12 months ended September 30, 2014 of approximately $49.9 million, the companies say. Luna's earned $20.0 million over the same time period. The merged companies also will own more than 200 patents and patent applications.

Luna cites its core test and measurement products (see "Luna Technologies offers OBR 4600 Optical Backscatter Reflectometer" and "Luna Technologies offers new Optical Vector Analyzer") and API's High Speed Optical Receiver (HSOR) and Optosolutions product lines as strengths.

"This merger will enable us to provide even greater capability across a broadened market base, providing improved opportunity for growth," said Luna President and CEO My Chung. "Joining forces with a company like API will help us accelerate our path to profitability."

Chung will continue as CEO of the combined company and a member of the board of directors. The board of directors will be expanded to seven seats and will be composed of three directors designated by Luna's board of directors, who will include Richard W. Roedel as chairman, John B. Williamson III, and Michael W. Wise. They will be joined by three directors designated by API's board of directors, who will include Donald Pastor, Gary J. Spiegel, and Ed J. Coringrato Jr.

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