Wednesday, August 27, 2008

StockerYale takeover bid of Virtek Vision fails

By Mass High Tech Staff

After several bids over the past three months to acquire Canada-based laser technology maker Virtek Vision International Inc., the final offer from Salem, N.H.-based StockerYale Inc. has expired.

StockerYale’s final offer of 70 cents per share, which was a 4 cent increase from its original offer in May, was not accepted by the Canadian company, and as a result the previously announced minimum acquisition target of 66 2/3 percent of shares was not reached.

According to previous announcements, StockerYale (NASDAQ: STKR) had entered into agreements with at least one institutional shareholder to buy 17.5 percent of Virtek’s outstanding shares, but with the deal dead, those shares will be returned.

StockerYale, a designer and manufacturer of structured light lasers, LED modules and specialty optical fibers, made its first offer to buy Virtek in May, when it offered 64.5 cents per share. In July, the company increased its price to 68.5 cents per common share at closing, plus a cash distribution of 9.8 cents per share at the close of the deal. Neither deal was accepted.

After StockerYale’s latest bid earlier this month, Virtek filed an application with the Ontario Securities Commission (OSC), questioning whether StockerYale had sufficient funds to finance the bid price. StockerYale said it does not agree with Virtek’s view that it lacks sufficient funds, resulting in the extending of the expiration date of the offer. From the first offer, Virtek has declined StockerYale’s advances, citing that such a deal was “not in the best interest of shareholders.”

In June, StockerYale won an evergreen contract for its Photonics Products unit to supply an unnamed global technology company’s telecommunications division with customized, packaged laser diodes. The contract, according to StockerYale officials, is expected to be worth a six-figure dollar amount initially and increase over time.

Founded in 1946 as Stocker & Yale Inc., the photonics company reported a 2007 net loss of $8.5 million on revenue of $29.9 million.