Petaluma-based Raydiance acquired by Santa Clara company
The assets of Petaluma-based Raydiance, maker of fast-pulse lasers used in production of automotive and medical devices, were acquired by Santa Clara-based Coherent (NASDAQ: COHR) and operations relocated to a new business unit in Richmond.
Coherent acquired the assets of Raydiance and Richmond-based Tinsley Optics, part of L-3 Communications Corporation and maker of specialty optics and subsystems, on July 28 for a combined $9.3 million in cash, not including transaction costs, said Leen Simonet Coherent chief financial officer on a conference call July 30 about fiscal third quarter results.
Coherent created a new Integrated Optical Systems business unit in Richmond, the company said in an announcement about the sale on Raydiance’s website.
Raydiance had 61 full-time employees at its 42,000-square-foot offices at 1450 N. McDowell Blvd. as of early June, based on an announcement of the asset sale at the time. Coherent officials told analysts on the conference call that the company hired a “core team” of Raydiance employees.
Raydiance revenues last year were $11 million and projected to be $21 million this year, the bid notice said. Raydiance and Tinsley had roughly equal revenue, said Coherent CEO John Ambroseo during the conference call.
“Raydiance has built a strong share and application know-how position in the ultrafast laser and optical subsystem markets for precision micromaterials processing, specifically automotive fuel injectors and medical device manufacturing,” Ambroseo said. “The recent introduction of the new Monaco and Rapid FX ultrafast laser products from Coherent, together with Raydiance’s expertise in ultrafast optical subsystems, will enable Coherent to provide an unmatched portfolio of laser and optical subsystem solutions to address our customer’s needs in both micromaterial processing and microelectronics.”
The market for short-pulse lasers like Raydiance’s in manufacturing is active, he said later in the call.
“And one of the reasons that we acquired the Raydiance assets is we feel that it can help us develop that market better and faster than we could simply as a laser manufacturer,” Ambroseo said.
More than 150 Raydiance systems are installed worldwide at eight of the top 20 global medical-device makers and half the top 12 automotive parts manufacturers worldwide, particularly for fuel-injector spray nozzles, according to the asset bid notice. Among the major users for consumer products was Samsung. Raydiance had 53 patents, including 20 pending.
A touted benefit of the femtosecond-pulse - 1 quadrillionth of a second - lasers Raydiance developed is reduced or eliminated post-processing such as grinding, etching, sanding and polishing. A high-profile use of such lasers is cutting scratch-resistant yet brittle Gorilla Glass and sapphire screens in smartphones and tablets. Raydiance products range in price from $275,000 for stand-alone lasers to $1 million for full-production systems.
Coherent already makes industrial lasers with nano-, pico- and femtosecond pulses, depending on the quality and throughput needs of the product.
Raydiance and Tinsley are expected to contribute combined annual revenue of $14 million to $20 million, Coherent said in its quarterly report.
Former AOL CEO Barry Schuler started Raydiance in Florida in 2003 after the military DARPA program recruited him to commercialize technology developed by the University of Central Florida. He moved the company to Petaluma in 2007 and expanded it to offices twice as large in 2012.
Raydiance raised $80 million in five rounds of financing, led by DFJ, DFJ Growth and Samsung Ventures.
It’s the second major sale of a Petaluma high-tech company this year, following the May deal by telecommunications equipment provider Ciena to acquire networking equipment and software developer Cyan for $400 million.
Started in 1966, Coherent makes lasers and related technology for research, commercial and industrial users. Net sales in fiscal 2014, ended Sept. 27, were nearly $800 million.