3S PHOTONICS to acquire Avensys Corp.'s subsidiary in Canada

DECEMBER 17, 2009 -- Upon the close of the sale, the assets of Avensys Inc.’s two divisions, Avensys Technologies and Avensys Solutions, and the assets of ITF Laboratories Inc. will be merged with 3S PHOTONICS. The closing of the sale is expected in January 2010.

DECEMBER 17, 2009 -- 3S PHOTONICS, French manufacturer of optical and optoelectronic components for telecommunications networks, has entered into a share purchase agreement to acquire Avensys Group subsidiaries, Avensys Inc. and ITF Laboratories Inc., for a total of EUR 6.5 million .

The holding company Avensys Corp., formerly quoted on the Nasdaq, owns two companies: Avensys Inc., its wholly owned subsidiary, and ITF Laboratories Inc., in which it owns a 42% interest, the majority of the remaining shares belonging to the Canadian State. Over the 2008 fiscal year (ending on June 30, 2009), Avensys Corp. realized turnover of US$23 million. The company employs 200 people.

Avensys Inc. designs, manufactures, and distributes optical components and modules for the telecom market as well as high-power devices, subassemblies, and fiber-based sensors for the industrial market. It is established in the Canadian environmental monitoring solutions and services market for air, water, soil, and geo-structures. The company handling R&D, ITF Laboratories Inc., develops integrated photonics devices as well as components and fiber-based systems for fiber lasers and optical sensing applications.

Upon the close of the sale, the assets of Avensys Inc.’s two divisions, Avensys Technologies and Avensys Solutions, and the assets of ITF Laboratories Inc. will be merged with 3S PHOTONICS. The closing of the sale is expected in January 2010.

"We are proud of this acquisition, which corresponds to the implementation of the external growth strategy that we planned last July when we raised funds. We are also delighted to welcome such a great company, armed with know-how which will complement our own, and to establish links across the Atlantic with our Canadian friends," says Alexandre Krivine, president and chief executive officer of 3S PHOTONICS.

"This is an important and necessary step for Avensys Inc.," says John Fraser, chief executive officer of Avensys Corp. "Combining the operations of two businesses with leading-edge and complementary technologies maximizes technological synergies, operational consolidation, and opens up bigger market prospects for Avensys Inc. and 3S PHOTONICS."

Last July, 3S PHOTONICS raised funds of EUR 13 million from three investment funds, FSI, Alto Invest, and Midi Capital. The company thus continued its objective of accelerating its growth process with external growth operations and diversification of its activity. With this buyout, the French manufacturer's commitments are taking shape.

With a turnover of EUR 23.04 million in FY09 (July 2008 to June 2009), 3S PHOTONICS expects to achieve, as a result of the integration of Avensys, a cumulated turnover in the region of US$70 million in the next fiscal year.

3S PHOTONICS says it will benefit from significant synergies, with an additional EBITDA estimated at more than US$3 million for 2012. Its eventual objective is to achieve sufficient crucial mass of annual turnover of between EUR 100 and 150 million.

The company says the integration of Avensys will help build a more balanced and more comprehensive portfolio of activities, helping to consolidate its offerings in terms of optical components, filters, and packaging intended for the industrial laser market and the telecom market.

3S PHOTONICS also expects to benefit from significant expansion of its R&D capacities. The French manufacturer currently invests 15% of its revenue in R&D (the French average is 3%). With Avensys, R&D staff should exceed 70 people, representing more than 20% of overall combined manpower. The Canadian State should also contribute to the financing of this R&D, in the form of a tax credit granted to ITF Labs (close to CDN 1 million per year), a contribution made possible by the legal and financial structure of ITF Labs.

The buyout of Avensys allows 3S PHOTONICS, already present in the Asia-Pacific zone, to invest in the North American continent for the production and distribution of optical components and to bolster its client portfolio. The French manufacturer will strengthen its international expertise particularly within the submarine telecom market.


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