HIRAM, Ohio & NORTHVALE, N.J.– Inrad Optics, Inc. (OTCMKTS:INRD) (“Inrad Optics” or the “Company”), a provider of advanced optical components, assemblies and systems, today announced that it has entered into a definitive merger agreement to be acquired by Luxium Solutions (“Luxium”), an affiliate of private equity firms SK Capital Partners (“SK Capital”) and Edgewater Capital Partners (“Edgewater”), in an all-cash transaction that values Inrad Optics at approximately $19 million, including assumed debt.
Following the close of the transaction, Inrad Optics will remain a U.S.-controlled and operated company. Luxium, SK Capital and Edgewater are each headquartered in the United States and have a demonstrable track record as responsible owners of businesses serving the U.S. defense industry.
Under the terms of the definitive merger agreement, Luxium has agreed to acquire all issued and outstanding shares of Inrad Optics common stock, including common stock underlying its $2.5 million convertible notes and in-the-money stock options, for $1.10 per share in cash. Clarex, Ltd. and Welland, Ltd., holders of Inrad Optics’ $2.5 million convertible notes, have agreed to convert the full principal amount of such notes into common stock, and have entered into a voting agreement in support of the transaction.
Following the closing of the transaction, Inrad Optics expects to benefit from the significant resources, operational expertise and capacity for investment provided by Luxium, SK Capital and Edgewater. Under the new ownership, Inrad Optics will be able to accelerate investments in technologies that are vital to development of next generation bent X-ray crystal monochromators for spectroscopy and plasma fusion applications, and large-format, ultra-high precision optical components and assemblies.
“This transaction delivers immediate and certain value to our stockholders,” said Jan Winston, Chair of Inrad Optics’ Board of Directors. “Inrad Optics’ strategic corporate mission has never been more important, and this transaction allows us to maximize value for current stockholders while providing capital for refinancing the business and accelerating the Company’s growth.
“Today’s announcement is a testament to the extraordinary hard work and dedication of our team,” said Amy Eskilson, Chief Executive Officer of Inrad Optics. “SK Capital and Edgewater have a demonstrated record of success building businesses and a desire to support Inrad Optics in advancing our long-term strategic objectives as part of a stronger combined organization with Luxium. As a part of a private company, we will have enhanced flexibility and additional financial resources to build on Inrad Optics’ strong foundation, further scale operations, and capture significant opportunities in rapidly growing markets.”
“In our view, Inrad Optics is a well-positioned and attractive business in ultra-high precision optical components, with an incredible team and multiple opportunities for success,” said Michael Cahill, CEO, Luxium. “Luxium continues to execute on our strategy, and with the addition of Inrad Optics, we remain dedicated to our conviction to focus in materials science solutions and photonic technologies the market demands. We believe Inrad Optics will provide unique and complementary capabilities to Luxium, and our objective is to support the combined team to push the boundaries of innovation, ensuring successful outcomes for our customers.”
Under the terms of the agreement, which has been unanimously approved by Inrad Optics’ Board of Directors, Inrad Optics stockholders will receive $1.10 in cash for each share of common stock they own.
SK Capital and Edgewater have arranged committed debt financing for the transaction, providing a high level of closing certainty.
The agreement includes a 30-day “go-shop” period expiring at 11:59 pm EST on May 8, 2024. During this period, the Inrad Optics Board of Directors and its advisors will actively initiate, solicit and consider alternative acquisition proposals from third parties. The Inrad Optics Board will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. There can be no assurance that this “go-shop” will result in a superior proposal or that any other transaction will be approved or completed, and Inrad Optics does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or otherwise required. The Company will contemporaneously pursue shareholder approval required to conclude the transaction.
The transaction is expected to close mid-2024, subject to customary closing conditions, including approval by Inrad Optics stockholders. Upon completion of the transaction, Inrad Optics’ common stock will no longer be publicly listed. It is expected that Inrad Optics will continue to operate under the same brand and maintain its current headquarters in Northvale, New Jersey.
The foregoing description of the merger agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety by reference to, the full terms of the merger agreement, which Inrad Optics will be filing on Form 8-K.
