General Dyn. to buy Axsys for $643m

Wednesday, July 1, 2009
FAIRFAX, Va., and ROCKY HILL, Conn.--General Dynamics announced in early June it has agreed to acquire high-end camera maker Axsys Technologies for $643 million, or $54 per share. The boards of both companies have approved the acquisition, but it needs to be approved by Axsys shareholders and is subject to regulatory approval, so it is expected to close this fall. 
This announcement comes just a few months after Axsys told shareholders it was exploring a sale of the company and had hired investment firm Jefferies & Company to investigate options. The stock price had fallen from roughly $70 in late 2008 (and a high near $80 last summer) to a low of $25 in March. The stock had been hovering around $40 per share after news of the potential sale broke.
Wall Street analysts have been proven right in their predictions at the time that a government contractor was likely to buy the company eventually, as Axsys’s camera technology focuses on high performance electro-optical and infrared sensors and systems and multi-axis stabilized cameras typically sold to the military. However, said Jeff Nestel-Patt, Axsys director of corporate marketing, part of the company’s recent growth and success is attributable to applications that go beyond its traditional military roots. “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.”
Axsys does roughly $250 million in yearly revenue, but grew by some 18 percent in the most recent reporting quarter. It reported an operating margin of 16.6 percent and had $25 million in cash on hand. The company employs about 1,000, is based here in Rocky Hill, Conn., and has facilities in Alabama, California, Michigan, and New Hampshire.