Axsys Technologies exploring potential sale

Thursday, March 26, 2009

ROCKY HILL, Conn.--Surveillance and imaging manufacturer Axsys Technologies confirmed this week it is exploring a sale of the company and that it has hired investment-banking firm Jefferies & Company to explore options.

Though the company has performed well--with $250 million in revenue, growing at a rate of 33 percent in the last quarter, reporting an operating margin of 16.6 percent, and holding nearly $25 million in cash against zero debt--its stock price has fallen from a high of more than $70 in December to a recent low near $25.


"Is our stock price affected by the general meltdown in the markets?" asked Jeff Nestel-Patt, director of corporate marketing. "Probably. Does it have anything to do with the health of the business? No."

However, the stock price, combined with the company's overall health, has led outsiders to express interest in acquiring the firm and "there's a fiduciary responsibility to the stockholders to entertain these offers as they come along," Nestel-Patt said. "It seems smart to have an outside firm help us through the process."

Some Wall Street observers have suggested that one of the large defense contractors would be interested in Axsys' thermal vision technology. Others suggested rival Flir might purchase the company.

Nestel-Patt said the company is growing beyond its traditional military roots, however. "We're seeing wider adoption in protecting infrastructure of all kinds," he said, "commercial shipping, gas tankers, ports of entry, be they harbors or airports ... It's definitely increasing and expanding beyond the traditional military applications."

As for a timeline for the sale, Nestel-Patt couldn't hazard a guess. Jefferies & Company declined an opportunity to comment.