Precision Optics Corporation, designer and manufacturer of advanced optical instruments for the medical and defense industries, announced it has completed the acquisition of substantially all of the assets of Lighthouse Imaging LLC, a private equity holding company based in Windham, Maine. The acquisition combines two of the industry's leaders in medical optics and digital imaging, leveraging Precision Optics' next-generation capabilities in micro-optics and optical systems with Lighthouse Imaging's advanced capabilities and strong reputation in leading-edge optical imaging electronics and system integration.
Joe Forkey, President, and CEO of Precision Optics stated that this is an exciting time for Precision Optics, Lighthouse Imaging, their employees, their customers, and their shareholders as they bring together two of the medical industry's leaders in the development and manufacture of imaging systems. This strategic merger expands the depth and breadth of each company's capabilities, and they believe it will enhance their presence in the medical device industry. They expect this combination will accelerate the growth both of their companies have experienced in this market, as they increase their ability to assist their customers in developing next-generation applications which are helping to change the future of healthcare.
Founded in the late 1980s, Lighthouse Imaging in recent years has transitioned its business model to leverage its unique optical imaging electronics and systems engineering capabilities to assist medical device companies in developing next-generation applications. Lighthouse Imaging had revenues of $4.5 million and EBITDA of $232,000 for the 12-month period ended June 30, 2021, with approximately 66% of its revenue attributable to engineering services, and the remainder attributable to production activities. Precision Optics and Lighthouse Imaging believe up to four new projects should transition from engineering to production in the coming year, providing opportunities for significant growth going forward. Additionally, Lighthouse Imaging has a robust and expanding project pipeline.
Lighthouse Imaging was most recently owned by Anania & Associates Investment Company, a private equity firm focusing on Maine-based companies. Peter V. Anania, its president, and the chairman will join Precision Optics' board of directors. Lighthouse Imaging's management team, including Chief Executive Officer Tom Snyder, Chief Commercial Officer Robert Austring, and Chief Technology Officer Benjamin Gray, have agreed to continue with the combined company.
Tom Snyder commented that on behalf of Lighthouse owners and employees, he conveys the excitement about merging these two industry-leading companies. Thanks to a strong team and excellent partnerships with their customers, Lighthouse is poised for organic growth. They have a strong project portfolio and expect multiple products to transfer to manufacturing over the next 6-12 months. They have also been exploring investments in their business. This merger provides many of the benefits they were looking to acquire. He is confident that together, Lighthouse and Precision Optics are better positioned to address a robust medical imaging market and drive additional growth.
Dr. Forkey further continued that he is thrilled about Peter joining their board and Tom and the rest of the management team will continue after the merger. This will support continuity at Lighthouse Imaging and bring an incredibly talented group to the combined organization. Following this merger, they will present to customers an organization with even stronger capabilities than either of them had independently, with the scale of operations to support further investments for growth.
The total purchase price is $2.85 million in cash along with 2.5 million shares of Precision Optics. Potential additional payments up to $1.5 million are subject to certain earnout provisions to be evaluated over the next 2 years. Precision Optics completed an equity capital raise of $1.5 million at a per-share price of $1.60 concurrent with the closing of the acquisition and entered into a $2.6 million term loan with Main Street Bank of Marlborough, Massachusetts. The loan is a 7-year term loan with a variable rate of Prime plus 1.5% and a minimum rate of 4.75%. The Company also entered into a $250,000 line of credit with Main Street Bank.
Dr. Forkey also said that they expect this acquisition will be accretive to Precision Optics' profitability per share. Their ability to utilize available bank financing marks a new chapter for their company and they will continue to look to organically and inorganically build capabilities and scale operations to take advantage of robust healthcare and defense markets. Associated with their growth, Precision Optics will resume hosting annual meetings of shareholders in the coming months.
Precision Optics will file an 8-K with the Securities and Exchange Commission with additional details regarding the transaction and intends to amend this 8-K within 71 days to include Pro-forma financial statements.