Transcat, Inc. (Nasdaq: TRNS) (“Transcat” or the “Company”), a
leading provider of accredited calibration services, enterprise
asset management services, and value-added distributor of
professional grade handheld test, measurement and control
instrumentation, announced that it has acquired all of the capital
stock of privately-held Axiom Test Equipment, Inc. (“Axiom”),
effective August 8, 2023. The $38 million purchase price was paid
in combination of $28 million in Company stock and $10 million in
cash and is subject to certain customary holdback provisions.
Founded in 2005, Axiom is an established rental provider of
Electronic Test Equipment to customers across the United States.
The company has 26 employees and is headquartered just outside of
San Diego, California. Axiom has an in-house ISO 17025 lab, which
is primarily utilized for internal calibrations and equipment
repair services. The existing staff and leadership team, led by
current Axiom President Josh Shilts, will remain in place, and will
continue to service customer needs.
“Axiom is a well-established, fast-growing player in the Test
Equipment rental market. They have demonstrated the ability to grow
consistently, while expanding profitability, both attributes that
align closely to Transcat’s historic performance. Our combined
Rental business is expected be approximately $24 million in
revenue, with expected Gross Margins above 55%,” according to Lee
Rudow, President and Chief Executive Officer. “Axiom is a
profitable business that will expand our existing Rental offering,
which we believe will create opportunities for accelerated growth,
while also bringing skilled staff with extensive industry knowledge
and expertise.”
Mr, Rudow added, “Once Axiom is integrated into our existing
Distribution business, we expect the near-term combined gross
margins to be in the 28% to 30% range and would expect the margins
to improve over time from there as the rental business continues to
grow faster than the traditional distribution business.”
“Importantly, the two rental businesses are complementary to one
another in that there is little overlap in the rental asset
portfolios, as well as little overlap in customers. We believe that
this presents a compelling cross sell opportunity that we will be
able to quickly leverage.”
“From a Service lead generation standpoint, our Distribution and
Rental business is a value differentiator and we are confident that
adding Axiom to the equation will provide additional opportunity to
drive strong organic calibration service growth into this newly
acquired customer base. We have demonstrated the ability to execute
on these opportunities and would expect nothing different in the
case of Axiom.”
“For these four reasons, expansion of offerings, profit/margin
enhancement, cross-selling opportunities and lead generation for
our Services business, we see Axiom as a great strategic fit for
Transcat.”
ABOUT TRANSCAT
Transcat, Inc. is a leading provider of accredited calibration,
reliability, maintenance optimization, quality and compliance,
validation, Computerized Maintenance Management System (CMMS), and
pipette services. The Company is focused on providing best-in-class
services and products to highly regulated industries, particularly
the Life Science industry, which includes pharmaceutical,
biotechnology, medical device, and other FDA-regulated businesses,
as well as aerospace and defense, and energy and utilities.
Transcat provides periodic on-site services, mobile calibration
services, pickup and delivery, in-house services at its 27
Calibration Service Centers strategically located across the United
States, Puerto Rico, Canada, and Ireland. In addition, Transcat
operates calibration labs in 21 imbedded customer-site locations.
The breadth and depth of measurement parameters addressed by
Transcat’s ISO/IEC 17025 scopes of accreditation are believed to be
the best in the industry.
Transcat also operates as a leading value-added distributor that
markets, sells and rents new and used national and proprietary
brand instruments to customers primarily in North America. The
Company believes its combined Service and Distribution segment
offerings, experience, technical expertise, and integrity create a
unique and compelling value proposition for its customers.
Transcat’s strategy is to leverage its strong brand and unique
value proposition that includes its comprehensive instrument
service capabilities, enterprise asset management, and leading
distribution platform to drive organic sales growth. The Company
will also look to expand its addressable calibration market through
acquisitions and capability investments to further realize the
inherent leverage of its business model. More information about
Transcat can be found at: Transcat.com.
Safe Harbor Statement
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are not statements of historical fact
and thus are subject to risks, uncertainties and assumptions.
Forward-looking statements are identified by words such as
“expects,” “estimates,” “projects,” “anticipates,” “believes,”
“could,” “plans,” “aims” and other similar words. All statements
addressing operating performance, events or developments that
Transcat, Inc. expects or anticipates will occur in the future,
including but not limited to statements relating to anticipated
revenue, profit margins, the Company’s response to the coronavirus
(COVID-19) pandemic, the commercialization of software projects,
sales operations, capital expenditures, cash flows, operating
income, growth strategy, segment growth, potential acquisitions,
integration of acquired businesses, market position, customer
preferences, outlook and changes in market conditions in the
industries in which Transcat operates are forward-looking
statements. Forward-looking statements should be evaluated in light
of important risk factors and uncertainties. These risk factors and
uncertainties include those more fully described in Transcat’s
Annual Report and Quarterly Reports filed with the Securities and
Exchange Commission, including under the heading entitled “Risk
Factors.” Should one or more of these risks or uncertainties
materialize, or should any of the Company’s underlying assumptions
prove incorrect, actual results may vary materially from those
currently anticipated. In addition, undue reliance should not be
placed on the Company’s forward-looking statements, which speak
only as of the date they are made. Except as required by law, the
Company disclaims any obligation to update, correct or publicly
announce any revisions to any of the forward-looking statements
contained in this news release, whether as the result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20230808422448/en/
Linda Reynolds Executive Assistant 35 Vantage Point Drive
Rochester, NY 14624 Phone: 585.866.1969
Email: linda.reynolds@transcat.com
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