In this edition, Thierry Georges, founder and president of Oxxius, reflects on why mergers and acquisitions are becoming an increasingly important accelerator for the European photonics industry. While photonics technologies remain fragmented, strategic partnerships and M&A activity are helping companies scale faster, strengthen capabilities, and open new markets.
Our world faces many challenges, and it seems that photonics is always part of the solution. One of the reasons is the wide range of technologies photonics encompasses. Just imagine! In the field of light emission, which I know well, you have lamps, LEDs, and lasers. Laser can be based on gas, semiconductor, fiber, and crystals. These lasers can be continuous or pulsed, nanosecond, picosecond, or femtosecond. There are white light sources and wavelength combiners. Single-frequency lasers. I could go on and on with this list. Obviously, many technologies will disappear or retain only a very small market share. But we could expect some consolidation.
How can we build photonics giants on a such fragmented market? At the EPIC SUMMIT in Juan-les-Pins last week, Chuck Mattera told us the story of the exponential growth of II-VI (now Coherent) based on successful and strategic acquisitions. Many companies represented at the EPIC SUMMIT, such as Exail or Excelitas followed the same strategy. At any stage of development, companies can fill up a gap or open a new market through a strategic acquisition. Mergers and Acquisitions (M&A), very common in industry, is particularly relevant in a sector as fragmented as photonics. It can significantly speed up company growth at reduced risk.
Is Europe equipped to foster the emergence of new leaders in photonics? University research in Europe is excellent. The number of spin-offs emerging from these labs is rising sharply. European financial markets are now rewarding photonics companies that can combine organic growth with external growth. The remarkable stock exchange trajectory of Exosens with a track record of successful acquisitions is an example and Paul Ryckaert confirms that this strategy will be continued.
Strong M&A in photonics market boosts venture capitalists interest in startups which subsequently offers more Acquisition opportunities to growing companies. However, Ewit Roos from PhotonVentures reminded us that European M&A still lags behind its American counterpart. He identifies at least one reason for this: European photonics startups take longer to be acquired. He sees this primarily as a matter of mindset. American companies are “M&A ready” since their inception.
Of course, M&A is not a goal; it is a tool. Wilhelm Kaenders presented the success story of Toptica. A bootstrapped company that nevertheless did not hesitate to acquire strategic and complementary expertise. An acquisition can serve as an accelerator or a shortcut to reach a target market more quickly. It is in this spirit that my company, Oxxius, recently acquired 89North, an American company.
So let’s all be M&A-compatible and M&A-ready. But to take advantage of opportunities, you need to know your ecosystem. The EPIC SUMMIT should help us get to know each other better.
