Rofin-Sinar Technologies Inc.
Rofin-Sinar Technologies Inc.
40984 Concept Drive
Plymouth, Michigan 48170
Telephone: (734) 455-5400
Fax: (734) 455-2741
Web site: http://www.rofin-sinar.com
Incorporated: 1975 as Sinar Laser Systems
Sales: $375.19 million (2005)
Stock Exchanges: NASDAQ Frankfurt
Ticker Symbols: RSTI 902757
NAIC: 333512 Machine Tool (Metal Cutting Types) Manufacturing; 333992 Welding and Soldering Equipment Manufacturing; 339943 Marking Device Manufacturing
ROFIN-SINAR Technologies Inc. is a leading producer of industrial lasers. It has sold nearly 40,000 laser sources in its first 30 years and has one of the widest product ranges in the industrial laser industry, making diode, CO2 solid-state systems. The company was spun off from Siemens AG in 1996.
Rofin-Sinar has operational headquarters in Plymouth, Michigan, and Hamburg, Germany, and manufacturing facilities in Germany, the United States, Japan, the United Kingdom, Spain, Sweden, Singapore, and China and sales and support offices in a number of other countries as well. More than half of revenues came from Europe in 2005. A third of the company's sales were to the machine tool industry. The semiconductor and electronics (12 percent) and automotive industries (9 percent) were also significant.
The story of ROFIN-SINAR Technologies Inc. begins with the launch of Sinar Laser Systems (Sinar Lasersysteme) in Hamburg, Germany, in 1975. It was formed by Samuel Simonsson, who would be its first president, and two partners. In the days before widespread industrial use of lasers, the enterprise had trouble finding funding until local venture capitalist Eberhard Lohss bought a holding, according to the Wall Street Journal. Within a few years, Sinar bought Rofin of the United Kingdom and adopted the name Rofin-Sinar G.m.b.H.
Simonsson told the Wall Street Journal that the company originally sold lasers made by others. Rofin-Sinar produced its first laser in 1982 and by the end of 1986 had sold more than 300 of them to industrial clients, who used them for cutting and welding. Revenues were growing at a 70 percent annual rate and by the mid-1980s, Rofin-Sinar was the world's third largest manufacturer of industrial lasers.
The Wall Street Journal held the company up as an example of how Germany was beginning to match the high tech prowess of the United States and Japan. Germany was investing more in laser development, which complemented traditional Teutonic strengths in optics and precision machining, than its overseas rivals. Still, tiny Rofin-Sinar, with sales of roughly $25 million, was less than one-eighth the size of the leading com-mercial laser manufacturer at the time, California's Spectra-Physics Inc. The total world laser market was valued at $500 million; Rofin-Sinar then competed in a small niche, mainly catering to auto makers. Its custom-installed laser units were priced at $50,000 to $1 million and weighed as much as one ton each.
The company was inventive enough to license one of its early designs to Spectra-Physics for sale in the United States. In its first decade, Rofin-Sinar was focusing its research on making industrial lasers more powerful and more reliable by developing new types of power sources and other components.
ACQUISITION BY SIEMENS IN 1987
Siemens AG, the German electrical and electronics giant, acquired Rofin-Sinar in 1987, seeking access to its laser technology. Under Siemens, Rofin-Sinar invested heavily to become a vertically integrated enterprise while entering new market segments and geographical areas. The company bought its U.S. licensee, the Industrial Laser Division of Spectra Physics Corporation, in 1988. It soon entered the French market by buying Optilas Laser Industriel. The 1989 acquisition of Coherent General Inc.'s Laser-Optronic GmbH brought Rofin-Sinar into the laser marking business. This process used lasers to inscribe nearly indelible code numbers on items such as auto parts and computer chips. Laser-Optronic was renamed the Laser Marking Division in 1992.
Unfortunately, the global recession of the early 1990s hit machine tool manufacturers, Rofin's main customers, hard. By 1992, competition for remaining business was so fierce that laser manufacturers were cutting prices, noted a company financial report. Layoffs and other cost-cutting measures followed, including outsourcing, leasing excess office space, and closing a site in San Jose, California. Rofin-Sinar posted a $20 million net loss on revenues of $60 million in 1993 but was in the black again within a couple of years. In 1995, the company achieved a $3.2 million profit on revenues of $92.5 million. Rofin-Sinar then had 450 employees. The U.S. and European markets for industrial lasers were showing signs of recovery, but the company was looking to Asia for its strongest growth.
Rofin-Sinar was spun off from Siemens AG in 1996. The company had sold approximately 4,000 laser sources in its first 20 years. A Delaware corporation, ROFIN-SINAR Technologies Inc. (RSTI), was formed in July 1996 as a holding company for Rofin-Sinar Inc. and Rofin-Sinar Laser GmbH. RSTI went public that October in an offering that raised $70.1 million.
In 1997 Rofin-Sinar bought DILAS Diodenlaser, bringing into the fold a third type of technology, semiconductor diode lasers, in addition to its existing CO2and Nd:YAG (Neodymium Yttrium Aluminium Garnet, a solid-state crystal) laser systems. Diode lasers were much smaller, more efficient, and less expensive to buy. (These are the types of lasers found in CD players.) The company made two more purchases in the late 1990s: the assets of Palomar Technologies UK Ltd. (1998), which formed the basis of a new U.K. subsidiary, and RasantAlcotec Beschichtungstechnik GmbH (1999).
According to Crain's Detroit Business, U.S. carmakers were exhibiting a renewed interest in lasers as a means to more efficient production. The industry used CO2 lasers for cutting steel and the lower-powered Nd:YAG lasers for welding.
Rofin-Sinar made 800 lasers in 1999 and by the end of the year counted an installed base of more than 6,000 laser units around the world. The company had added manufacturing plants in the United States, United Kingdom, and Japan. It was enjoying increased sales to the electronics industry during the tech boom, though the effects of the Asian financial crisis would be a drag on earnings.
With more than 30 years of experience in laser technology, ROFIN-SINAR Technologies Inc. has successfully focused its strategy on being an innovative leader in the industrial laser market and has consistently demonstrated its ability to develop new key technologies and to deliver the most powerful and progressive manufacturing tools to a wide range of industries.
PURCHASE OF BAASEL LASERTECH: 2000
Another new business was added in 2000 with the $40 million acquisition of Baasel Lasertech Group from Mannesmann Demag Krauss-Maffei AG. This would become the basis of the new Micro unit, whose products were used to perform intricate procedures in the jewelry, dental, medical equipment, and electronics industries. (Baasel also had a significant laser marking business.) This purchase, which was the company's largest to date, brought Rofin-Sinar's total annual revenues from $124 million to about $200 million while diversifying the company's client base.
Baasel's medical laser business was sold to Hamburg's WaveLight Laser Technologie AG in 2001; Rofin-Sinar bought Z-Laser S.A. during the year. In June 2001 Rofin's shares were listed on Germany's Neuer Markt (they continued to trade on the NASDAQ in the United States).
Net income of $15 million in 2003 was three times the previous year's figure. Revenues had risen from $222 million to $258 million.
THREE SIGNIFICANT ACQUISITIONS IN 2004
One of the company's suppliers, Sweden's Optoskand AB, was acquired in February 2004 (actually, Rofin obtained a 90 percent holding), a couple of years after it was spun off from Permanova Lasersystem AB. Optosk-and made fiber-optic systems for high-power solid-state lasers (but not the laser sources) and had about two dozen employees and annual sales of $3 million. It had been one of Rofin's suppliers for years.
ROFIN-SINAR acquired two other companies in 2004. One was PRC Laser Corporation, which specialized in providing high-power CO2 lasers for the machine tool industry. Based in Landing, New Jersey, PRC had grown to employ five dozen people since its founding in 1986.
Lee Laser Inc. of Orlando, Florida, had been acquired by PRC in 1999 and was also acquired by ROFIN-SINAR. Lee had been formed 20 years earlier and focused on low power laser sources (as opposed to complete, installed systems) for marking and micro applications in the semiconductor and electronics industries. Lee and PRC were acquired from Dover Industries Inc. of Elgin, Illinois. The two had combined sales of about $30 million, most of it from outside the United States. Rofin-Sinar CEO Peter Wirth told Investor's Business Daily that Lee and PRC were attractive acquisitions targets because they brought Rofin into new markets. In addition, Rofin was looking to reduce its exposure to foreign currencies by buying the two U.S. companies.
The acquisitions of Lee Laser, PRC, and Optoskand were funded by a secondary stock offering that raised $75 million. Rofin-Sinar's share price had doubled between July and December 2004. The company was continuing to shop for acquisition targets, according to Wirth, who stepped down after suffering a stroke in January 2005. He was ultimately replaced by Gunther Braun, the company's chief financial officer since 1996.
STRONG GROWTH IN 2005
North America and Asia provided strong growth for the company in 2005. Sales for the fiscal year ended September 30 rose 16 percent to $375.2 million, while net income was up 17 percent to $38 million. Europe accounted for 54 percent of revenues, and North America, 29 percent. In all, ROFIN-SINAR shipped 3,100 laser sources during the year.
ROFIN-SINAR continued to expect its greatest growth in Asia and set up a subsidiary in Shanghai, China, in 2005. By this time, the total world laser market was estimated to be worth $1.5 billion. According to the company, its only rival of similar scale and product range was another German firm, TRUMPF GmbH + Co. KG.
- Sinar Laser Systems (Sinar Lasersysteme) is formed in Hamburg, Germany.
- Sinar acquires Rofin of the United Kingdom and becomes ROFIN-SINAR.
- Siemens AG buys ROFIN-SINAR.
- Company buys U.S.-based Industrial Laser Division of Spectra Physics as well as Optilas Laser Industriel of France.
- Laser marking specialist Laser-Optronic GmbH is acquired.
- Company restructures following global recession, posts $20 million loss.
- ROFIN-SINAR Technologies Inc. is spun off from Siemens and goes public.
- DILAS Diodenlaser is acquired, adding diode laser technology.
- Assets of Palomar Technologies UK Ltd. Are acquired.
- RasantAlcotec Beschichtungstechnik GmbH is acquired.
- BAASEL Lasertech purchase starts ROFINSINAR's Micro business.
- Z-Laser SA. is acquired.
- Optoskand, PRC, and Lee Laser are acquired.
ROFIN-SINAR, Inc.; ROFIN-SINAR Technologies Europe S.L. (Spain); Lee Laser, Inc.; PRC Laser Corp.
PRINCIPAL OPERATING UNITS
Laser Macro; Laser Micro; Laser Marking.
TRUMPF GmbH + Co. KG.
Bridgeforth, Arthur, Jr., "Light Makes Right: Rofin-Sinar Aims Its Lasers at Manufacturers," Crain's Detroit Business, March 10, 1997, p. 17.
Dietderich, Andrew, "Growth, Acquisitions Fuel Laser-Maker Rofin-Sinar's Rise," Crain's Detroit Business, February 7, 2005, p. 4.
Kincade, Kathy, "Rofin-Sinar Acquires Swedish Fiberoptics Firm," Laser Focus World, April 2004, p. 53.
Much, Marilyn, "Maker of Laser Gear Homes In on More Buys," Investor's Business Daily, December 23, 2004, p. A5.
O'Boyle, Thomas F, "German Technology Gains on U.S., Japan—Laser Maker's Success Exemplifies the Progress," Wall Street Journal December 15, 1986.
Reeves, Amy, "Acquisition Puts Focus on Growing Laser Field," Investor's Business Daily, July 16, 2001, p. A10.
"Rofin Buys PRC, Lee Laser," Metalworking Insiders' Report, September 30, 2004, pp. 1+.
"Rofin-Sinar Acquires Carl Baasel Lasertechnik," Laser Focus World, December 2000, p. 55.
"Rofin-Sinar Moves Forward with New CEO," Optoelectronics Report, May 15, 2005, p. 3.
Smith, Patricia L., "Size Doesn't Matter," American Machinist, July 1998, pp. 78 +.
Tate, Pamela, "Rofin-Sinar Closes Buy of Baasel Lasertech for $40 Million Cash," Dow Jones News Service, May 11, 2000.
Vasilash, Gary S., "A New Look at Lasers at Rofin-Sinar," Production, September 1, 1994, p. 46.