On February 21, 2017, LSI Industries Inc. announced that it has completed the acquisition of all equity capital of Atlas Lighting Products, a Burlington-quality LED lighting product entering the distribution market. For the fiscal year ended December 25, 2016, Atlas had revenues of $56.5 million and operating income of $8.8 million, of which private company fees were estimated to be $3.6 million. Similarly, the adjusted EbitDA is estimated to be approximately $9.7 million in net cash, and Atlas's balance sheet is undebted on December 25, 2016. Founded in 1992, Atlas has been operating as an S company since its inception.
The terms of the agreement include a cash payment of $969 million, plus 200,000 five-year warrants, and the acquisition of LSI's common stock at an exercise price of $9.95 for a total consideration of $97.5 million. The funds will be provided by a combination of cash on hand and a $66 million from a new $100 million commercial banking institution provided by PNC Bank.
CEO and President Dennis W. Wells commented: “I am very pleased to announce the acquisition of Atlas Lighting Products. This highly strategic acquisition is the largest acquisition in LSI history and will immediately expand our lighting products and expand our purchasing capabilities. , increase profit margins and provide significant revenue and cost synergies."
“Atlas' fast standard product line, including flooding, wall mounting, linear, column mounting and overhead luminaires, complements LSI's custom product line with minimal overlap, providing our customers with a very complete portfolio of LED lighting. LSI intends to maintain Atlas Brand, which is a well-received name in the distribution market, we will maintain an independent network of agents for the LSI and Atlas product lines. In our early integration program, we found many product cross-selling opportunities to become sales agents And distribution partners offer more products in these two sales channels, resulting in synergistic revenue growth opportunities at LSI."
“In addition to the complementary product lines of LSI and Atlas, we expect this acquisition to generate significant cost synergies. Atlas has established a procurement channel in Asia and we plan to use it in LSI's existing business. These procurement relationships and us The additional cost savings identified during the due diligence process are expected to benefit LSI in the short term, and the savings from eliminating private company spending will immediately benefit. We intend to implement the LSI business system to maximize savings potential."
“In the past few months, I have been impressed with Atlas' management team and I am very pleased to welcome all employees to LSI. We intend to maintain the Atlas facility in Burlington, North Carolina and sign a A seven-year lease contract with multiple renewal options."
“Given the complementary products of LSI and Atlas, coupled with the expected synergies between revenue and cost, I expect this acquisition to increase LSI's performance from FY1818 and accelerate the growth of revenues above market rates and improve our Gross profit and operating profit margin. This is an exciting time in the lighting industry, I believe that the combination of LSI and Atlas will provide many growth opportunities.
James H. Bennett, President of Atlas Lighting Products, commented: “I am very pleased to work with LSI Industries. I have always believed that LSI is a quality manufacturer of custom lighting, and I look forward to continuing to be President of Atlas Lighting, with Dennis and The LSI team collaborates to develop the business.
Chairman and CEO Sam Hunt III commented: "After 25 years of lighting business, I am happy to announce retirement. I believe in Dennis Wells, Jim Bennett and the entire LSI Under the management of the team, my business will be in good shape, and I wish them great success in the future.
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