Strengthens Portfolio of Distributed Fiber
Optic Sensing Solutions
Adds Significant New Growth Markets and
Applications and Further Expands Global Footprint
Conference Call Scheduled for Today, December
21st, at 11:00 AM ET
Luna Innovations Incorporated (NASDAQ: LUNA), a global leader in
advanced fiber optic-based technology, today announced the
strategic acquisition of Silixa, a UK-based leader in distributed
fiber optic sensing solutions. The acquisition further propels
Luna’s position in the fiber optic sensing market, adding
capabilities in distributed acoustic sensing (DAS), distributed
temperature sensing (DTS) and distributed strain sensing (DSS) that
offer enhanced performance for applications in energy, natural
environments, mining and defense.
Silixa is expected to achieve approximately $30 million in 2023
revenue, representing approximately 15% annual growth on a constant
currency basis. The purchase price consists of $21.5 million in
upfront cash consideration and up to an additional $16.5 million in
earnouts payable in 2025 upon the achievement of certain 2024
financial performance milestones. The transaction was funded with a
portion of the proceeds from White Hat Capital Partners’ strategic
investment in Luna, which was also announced today. Inclusive of
modest cost synergies, the acquisition is expected to be accretive
to non-GAAP earnings in the first year.
“The addition of Silixa not only elevates the portfolio of
solutions we already offer in our key end markets, but also further
strengthens our position as an enabler of energy transition by
extending our reach into exciting new growth sectors, such as
carbon capture and storage, as well as into monitoring processes
that will help sustain ecosystems and safeguard fragile
environments,” said Scott Graeff, President and Chief Executive
Officer of Luna. “Silixa brings important technology capabilities
and strong talent that we expect to leverage across our EMEA
footprint, which we expect will drive profitable growth across our
European enterprise.”
Strategic Benefits
- Enhances Luna’s Product Offerings: Silixa’s highly
complementary portfolio of sensing technologies and monitoring
capabilities augments Luna’s current product portfolio. Silixa
advances Luna’s solutions-based offerings with highly integrated
monitoring and real-time data solutions that yield valuable
insights and drive recurring revenue.
- Expands Luna’s Serviceable Addressable Market: Silixa not only
provides Luna access to emerging end markets, such as carbon
capture and geotechnical monitoring, but also adds incremental
capabilities and geographical reach within key existing end
markets, such as energy and mining.
- Increases Luna’s Scale: In addition to greater financial and
operational scale, Silixa brings proprietary sensing technologies,
expanding Luna’s industry-leading patent portfolio to nearly 1,000
with the addition of Silixa’s 200+ patents. Silixa’s established
presence in the U.K. adds significant talent in sales, marketing,
engineering and R&D, helping to round out Luna’s EMEA
organization.
“Today’s announcement is a pivotal milestone in the history of
Silixa and a testament to the hard work and dedication of our
employees,” said Co-Founders Mahmoud Farhadiroushan and Tom Parker,
who are both continuing with Luna. “We’re thrilled to be joining a
company that shares our focus on innovation and our passion to
provide solutions to some of the world’s most critical challenges,”
added Glynn Williams, CEO at Silixa, who will remain as an advisor
to Luna through 2024.
Needham & Company, LLC acted as financial advisor and Cooley
LLP acted as legal counsel to Luna in the transaction. PWC acted as
financial advisor and Addleshaw Goddard LLP acted as legal counsel
to Silixa.
Conference Call Details
Luna will host a conference call at 11:00 AM ET today, December
21, 2023, to discuss the transaction. The investor conference call
will be available via live webcast on the Luna website at
www.lunainc.com under the tab "Investor Relations." To participate
by telephone, the domestic dial-in number is 1.800.715.9871 and the
international dial-in number is 1.646.307.1963. Participants should
ask to join the Luna Innovations Incorporated conference call,
conference ID 2883309, and are advised to dial in at least fifteen
minutes prior to the call. A replay of the conference call will be
available on the company's website under "Webcasts and
Presentations" for 30 days following the conference call.
About Luna
Luna Innovations Incorporated (www.lunainc.com) is a leader in
optical technology, providing unique capabilities in
high-performance, fiber optic-based, test products for the
telecommunications industry and distributed fiber optic-based
sensing for a multitude of industries. Luna’s business model is
designed to accelerate the process of bringing new and innovative
technologies to market.
About Silixa
Silixa is the leading independent provider of distributed fiber
optic sensing solutions, offering an unrivalled technical portfolio
of end-to-end solutions that enable temperature, strain and
acoustic measurements at the highest fidelity in even the most
hostile settings. Silixa was created to secure a safer, more
sustainable future for people and planet by using accurate,
distributed, continuous, real-time, high-resolution data. Silixa
investors include Lime Rock Partners, Chevron Technology Ventures
and Equinor Ventures.
Forward-Looking Statement
The statements in this release that are not historical facts
constitute “forward-looking statements” made pursuant to the safe
harbor provision of the Private Securities Litigation Reform Act of
1995 that involve risks and uncertainties. These statements include
Luna’s expectations regarding Silixa’s projected 2023 revenue, the
potential payment of earnout consideration in connection with
future milestones, and the expected benefits of the acquisition of
Silixa, including the potential for the transaction to be accretive
to non-GAAP earnings in 2024, the expansion of Luna’s service
offerings, capabilities and geographic reach and scale, industry
trends, revenue and market opportunities, market growth, customer
relationships and operational efficacy related to its technology
and/or products. Management cautions the reader that these
forward-looking statements are only predictions and are subject to
a number of both known and unknown risks and uncertainties, and
actual results, performance, and/or achievements of Luna may differ
materially from the future results, performance, and/or
achievements expressed or implied by these forward-looking
statements as a result of a number of factors. These factors
include, without limitation, uncertainties regarding integration of
the companies’ respective employee bases, offerings and business
operations, potential adverse reactions or uncertainties regarding
the acquisition among the companies’ customers, potential unknown
liabilities and unforeseen expenses associated with the
acquisition, potential performance shortfalls as a result of the
diversion of management’s attention caused by completing the
acquisition and integrating the companies’ operations, failure of
demand for Luna's products and services to meet expectations,
failure of target market to grow and expand and technological
challenges, competitive forces and other risks and uncertainties
set forth in Luna’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, and Luna’s other periodic reports and
filings with the Securities and Exchange Commission (“SEC”). Such
filings are available on the SEC’s website at www.sec.gov and on
Luna’s website at www.lunainc.com. The statements made in this
release are based on information available to Luna as of the date
of this release and Luna undertakes no obligation to update any of
the forward-looking statements after the date of this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20231221780418/en/
Allison Woody Luna Innovations Incorporated Phone: 540.769.8465
Email: woodya@lunainc.com
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