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Photonics Industry M&A Activity

Premium Priced Strategic Acquisitions in Vertical Markets Served

Given strategic buyers with large cash reserves, a better financing environment for private equity, and an improved macro-environment, M&A activity in 2014 is more robust than in previous years. In the vertical market segments employing photonics technologies as core differentiators, a trend of premium priced, strategic acquisitions persists through 2014.

Middle market companies employing photonics to serve markets, such as 3D Printing, Unmanned Aerial Vehicles (Drones), LED Lighting, and Sensor Networks (Internet of Things), are realizing high valuations. So far this year, a handful of lower middle market companies with strong photonics IP portfolios are driving-up average Enterprise Value/Revenues multiples.

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Biophotonics M&A Activity

Medical Devices, Diagnostics, Environmental Monitoring, and Therapeutics

Biophotonics is the interdisciplinary science of applying light to biological life sciences – such as genomics, molecular and cell biology, neuroscience, biomechanics, and environmental science.  While not an industry in and of itself, Biophotonics is at the core of world-changing medical and life science products and businesses.

In 2014, multibillion-dollar deals are inked by Thermo Fisher Scientific, The Carlyle Group, Covidien, Grifols, and Panasonic - strategic buyers acquiring Biophotonics enabled medical device and diagnostic businesses.  Leading the pack in valuation with Enterprise Value/EBITDA multiples of 30-40x are:  ProteinSimple, a developer of instrumentation and consumables for protein analysis; Given Imaging, a provider of gastrointestinal diagnostic products based on a wireless pill camera; and DiaSpect Medical, a developer of hemoglobin measurement systems.

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Crafting Financing & Fund Raising Strategies

Financing Life Cycles & Costs of Capital

Whether you are an entrepreneur starting-up or the leader of an established business, a solid understanding of the available sources of capital and today's expected rate of return for capital is the fundamental step in crafting a financing and fund raising strategy.

Sources of capital have different preferences and practices, including how much money they will provide, when in a company's life cycle they will invest, and the cost of capital or expected rate of return. The available sources of capital change dramatically for companies at different stages and rates of growth.

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Financing New Product Development

When Capital Is Not Available Or At Very High Cost

When start-up or growth capital is not available or at a very high cost, harvesting your technology early is a feasible strategy.  Often, however, it a last resort - considered only after burning through many months shopping business plans to venture capital firms, lenders, or those at large corporations managing the R&D budget.  Consider bootstrapping and harvesting your most valuable asset - your technology - for cash, strategic customer relationships, market intelligence, application know-how and more.

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