Visionary acquisition for Cognex

Cognex Corp has acquired DVT Corp, a privately held company based in Duluth, Georgia.

Cognex Corp has acquired DVT Corp, a privately held company based in Duluth, Georgia.

Under the terms of the acquisition, Cognex purchased all of the outstanding shares of DVT for approximately $115,000,000, consisting of a cash payment of $104 million made at the closing, and a final payment of up to an additional $11 million in cash to be paid at the end of a one-year escrow period.

The acquisition was completed on 9th May 2005.

Cognex plans to maintain operations at DVT's current facility in Georgia, and to continue selling and supporting DVT's vision products through DVT's existing third-party distribution channel.

DVT Corp is a leading provider of low-cost, easy-to-use vision sensors, which it sells primarily to the fast-growing factory-floor segment of the machine vision business.

The company's principal product, Legend, is used by a large number of customers in a wide variety of industries for applications such as inspection and quality control.

"This is the largest acquisition that Cognex has ever completed - in terms of price, in terms of revenue, and most importantly, in terms of the positive impact that it will likely have on our company", said Dr Robert J Shillman, Chairman and CEO of Cognex.

Dr Shillman continued: "In recent years, Cognex has been very successful in expanding its product line by adding low-cost and easy-to-use vision products".

"Our In-Sight business has grown to over $60 million in just five years, and Checker, our newest entry into the presence-sensing market, is gaining traction".

"However, reaching the thousands of prospects for these products in factories around the world requires a large third-party sales and distribution channel to supplement our own direct end-user sales force".

"During 2004, Cognex started to build a third-party distribution channel, and prior to this acquisition we had signed over 40 distributors, mostly in North America".

"With the acquisition of DVT, Cognex immediately gains a worldwide network of more than 150 additional industrial distributors, all fully trained in selling and supporting machine vision products".

As a result of the acquisition, Cognex expects an increase in its revenue of approximately $15-20 million during fiscal year 2005.

The acquisition is expected to be neutral to earnings in 2005, and accretive, even including acquisition charges, in fiscal year 2006.

Due to the late timing of the transaction, Cognex expects the acquisition to have minimal impact on its second quarter results.

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