+33 (0) 7 86 84 25 12. contact@jolt-capital.com

From Evertiq:

1Manufacturer of high performance sensor and analog solutions, ams, has signed an agreement to acquire 100% of the shares in Heptagon, a company working in in high performance optical packaging and micro-optics.

With this transaction, ams furthers its position in optical sensing technologies anticipating industry and technology trends to drive growth in new applications. Heptagon provides micro-optics and optical sensing solutions with particular expertise in high performance optical packaging where the company has a strong position.

Currently focused on the consumer market, Heptagon is a major supplier into applications for mobile devices requiring high volume optical packaging at very small form factors. Heptagon sees growth opportunities with its current customer base which includes a key customer serving the smartphone and mobile device markets.

The company has its headquarters and manufacturing are based in Singapore while its R&D center is in Rueschlikon, Switzerland. The company has over 830 employees including around 120 engineers and 500 manufacturing staff – and also commands a strong and protected IP portfolio, primarily in optical packaging.

Heptagon expects revenue growth over the coming years starting mid-year 2017, based on its existing revenue and capacity pipeline and customer commitments. To prepare for this expected growth, Heptagon has already embarked on a major expansion of its Singapore manufacturing capacity with a total capital investment of more than USD 250 million in 2016/2017. The expansion is based on a confirmed customer commitment for usage of the additional capacity and is fully funded from existing cash in the business, requiring no funding by ams.

The transaction consists of an upfront consideration in cash and shares with a substantial deferred earn-out consideration. The upfront consideration includes USD 64 million in cash from available funds, a capital increase of 15% of outstanding shares from authorized capital (excluding subscription rights) and shares from current stock.

The total value of the upfront consideration of approximately USD 570 million.

The earn-out consideration will be contingent on future results of Heptagon’s business over fiscal year 2017 with a potential maximum value of USD 285 million.

Following the upfront share transaction, current Heptagon shareholders which include financial investors, management, and employees are expected to hold around 20% in ams. The transaction is expected to close within the next three months subject to certain approvals.