Newport to Sell Parts of Metrology Business
Online staff -- Electronic News, 4/11/2002
Newport Corp. today announced it plans to sell most of its industrial metrology systems division in two separate transactions. As part of the deals, Newport will retain rights to certain visual inspection and metrology technology.
Newport today signed an agreement to sell the contact measurement piece of the business, primarily related to its CEJohansson subsidiary in Sweden, to Hexagon AB, based in Nacka Strand, Sweden. Hexagon is an engineering company and parent of metrology company Brown and Sharpe, based in North Kingstown, R.I.
Newport also announced that it is in discussions to sell its U.S.-based non-contact metrology business to a separate, unnamed buyer. Financial details were not released.
Newport expects to receive a total of $10 million to $12 million in both transactions, which are expected to be final in the second quarter of this year. Once completed, the sales would be accretive to Newport’s operating results, because the sales will eliminate continuing losses in its metrology business.
The company’s metrology operations generated sales of about $24 million in 2001 and incurred operating losses of about $9 million. The business represented about $32 million of Newport’s total assets of $544 million as of Dec. 31, the company said.
"A key growth strategy of our company has been to expand Newport’s product portfolio and services in order to become a leading single-source supplier of test, measurement and automation solutions to the fiber optic communications and semiconductor equipment markets," said Robert G. Deuster, Newport’s chairman and CEO, in a statement. "Divesting our metrology business, which primarily serves end markets outside of our strategic focus, will allow us to more aggressively deploy Newport’s resources to those areas that hold the greatest growth potential for our company."
The divestiture will be accounted for as a discontinued operation, Newport said. The effect on net income and earnings per share will be reported both including and excluding the charges. The adjustment to Newport’s fiscal year 2001 results following the divestiture is expected to decrease 2001 sales by $24 million and increase diluted earnings per share from continuing operations by 14 cents, before charges.
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