Buchmann Holding of Belgium, which recently sold its lens manufacturing operations to Hoya, has signed a letter of intent to merge its French-based Briot International subsidiary with the 9-year-old Israeli-based Pro-Laser Group, which took over Weco and Rodenstock Instrumente from Rodenstock in 1999.
The combination would reducAe R&D costs and generate some interesting synergies. It would create the world's leading supplier of technology solutions for the optical retail market, with a combined estimated world market share of more than 40 percent in lens edging, and it would help sustain the development of new technologies, particularly in the field of laser-based instruments for refractive surgery.
The two potential partners have started due diligence proceedings with a June 30 deadline for the completion of the deal. The agreement in principle calls for Buchmann to take over control of Pro-Laser in exchange for a 51 stake in Briot, indicating that Pro-Laser would continue to trade on the Euronext stock exchange in Brussels. Buchmann would invest an additional amount of at least 2.5 million euros into the operation, in order to refinance it, and it would assume management responsibility for the new entity. It's not yet sure whether Ronnie Jägermann, the visionary founder and CEO of Pro-Laser, will continue to be involved, but he probably will.
Briot, Weco and other activities of Pro-Laser offer a strong complementarity not only in the product range, but also in terms of geographical coverage. For example, Briot is strong in France and Spain, where Pro-Laser is absent, while the latter can help Briot develop in such markets as Canada and Australia. Both companies are relatively strong in the rest of Europe and in the USA.
On the other hand, Pro-Laser can use the financial muscle of Briot and its Belgian holding company, which is also involved in real estate and other operations. In the past year, Pro-Laser's net losses increased to e8,052,000 from e2,788,000 in 1999, largely due to the cost of acquisitions and investments in new foreign subsidiaries in Austria, Australia and the UK. Revenues surged ahead to e60,053,000 from e15,925,000, yet the operating loss continued to rise, reaching e4,096,000, up from e3,156,000, largely because of significantly higher R&D expenses of e4,730,000.
Instead, Briot, which has a staff of about 190 persons, generated an operating profit of e6.6 million on revenues of e36 million. The pre-tax profit was only slightly lower as amortizations and interest expense were minimal. A few days ago, Briot's Accura Lab edger became the first edger to be certified by COLTS, the independent US quality testing lab.