Luna Innovations Inc LUNA disclosed a strategic investment of $50 million from White Hat Capital Partners.
The company will partially use the proceeds to fund the acquisition of Silixa, which was announced today, for $21.5 million in upfront cash consideration and up to an additional $16.5 million in earnouts payable in 2025 upon achieving certain 2024 financial performance milestones.
The company expects Silixa to achieve revenue of about $30 million in 2023, representing approximately 15% annual growth on a constant currency basis.
Luna expects to use the remaining proceeds from the investment to repay the outstanding $17 million term loan to boost the balance sheet.
The company plans to apply the proceeds of this investment across initiatives to enhance growth, such as capitalizing on inflection points for fiber optic sensing solutions adoption, increasing manufacturing capacity to meet higher demand, and boosting innovation.
David Chanley, Managing Partner at White Hat Capital Partners, said, "With additional scale and financial flexibility, Luna is uniquely positioned as the largest pure-play company to address the rising demand for fiber optic sensing solutions in its key end markets. These include pivotal roles in energy transition initiatives like carbon capture and storage (CCS) and electric vehicle (EV) adoption, as well as critical structural health monitoring and specialized aerospace & defense applications."
As of September 30, 2023, LUNA had cash and equivalents of $6.028 million.
Price Action: LUNA shares are trading higher by 4.41% at $6.80 on the last check Thursday.
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