Gerber Scientific is selling Gerber Coburn, its subsidiary specializing in ophthalmic lens processing equipment and consumables, and the smallest one of its three business units. The company making the purchase, Coburn Technologies, is newly formed and its primary investor is Edward Jepsen, a former board member of Gerber Scientific. Alex Incera, who has been running Gerber Coburn for the last three years, and Wayne Labrecque, vice president of sales, hold minority stakes.
The new shareholders say that the new company will be able to focus all its resources on its own business, without worrying about short-term results because of the public status of Gerber Scientific. The Gerber Scientific group, whose core business is textile cutting equipment, tried to obtain some synergies some five years ago through a shared-services program, notably in the area of after-sale maintenance, but then dropped the scheme after a couple of years because its technicians in Europe and elsewhere were losing focus.
Jepsen, a wealthy individual who retired a few years ago after selling Amphenol, a leading American firm specializing in electronic and fiber optics connectors, said the new company planned to grow through new business opportunities, aided by «invigorated» research and development efforts. Marc Giles, chief executive of Gerber Scientific, said the sale would help the parent company reduce its debt and invest more in its apparel and industrial segments, where it is market leader, improving its financial flexibility and facilitating bolt-on acquisitions in these sectors.
Jepsen will act as chief executive of the new company, Coburn Technologies. Incera, who has been with Gerber Coburn since 1995, will remain president, aided on the sales side by Labrecque, who joined the company in 1996.
They will supervise an international team that has been recently restructured. While Gerber Coburn has been keeping a three-man staff in Amsterdam for the Continental European market, its office in Bristol has been developing more and more as its main European hub under the management of Ian Hendy. He is now assisted by David Shorts, a sales manager who recently joined the team from Cerium. Based in Singapore, Ram Narayanan has been promoted as regional sales manager for the Asia-Pacific area.
Coburn Technologies is paying $21.0 million for the unit, which has been a source of losses for Gerber Scientific lately. Gerber Coburn's operating income declined by 26.5 percent to $2.5 million on 14.0 percent lower sales of $46.1 million for the financial year ended last April 30. In reporting its results for the first quarter ended July 31, Gerber Scientific said it had finally started to see an upturn in the sale of processing equipment for ophthalmic lenses, indicating that it had started to recover from the recession. A few days ago it reported an operating loss of $16.5 million at Gerber Coburn for the second quarter ended last Oct. 31 on 11.2 percent lower sales of $11.8 million, but company officials indicated that sales grew between May and November.
The closing of the sale is expected to occur on Dec. 31. Gerber Scientific has reported a non-cash goodwill impairment charge of about $16.9 million on the transaction for the second quarter ended Oct. 31. The group posted an operating loss of $14.4 million for the quarter, but excluding the impairment charge and restructuring costs, it had an operating profit of $4.7 million, up by 35.3 percent from one year ago. Revenues from continuing operations grew by 9.0 percent to $129.3 million, but the group reported a net loss of $16.1 million.
The sale of Gerber Coburn comes after the settlement last June of patent litigation with Schneider and its U.S. subsidiary. The case had been pending in the U.S. District Court for the Northern District of Texas. The terms of the settlement were not disclosed.