General Scanning announces merger with Canadian laser firm Lumonics

Company developing digitizer series

General Scanning of Watertown, MA, announced last month that it has signed an agreement to merge with Lumonics of Kanata, Ontario, pending shareholder and regulatory approval. Both firms develop laser technologies and hope that the merger will enable them to gain mass in that segment.

Lumonics produces laser-based advanced manufacturing systems for the semiconductor, electronics, aerospace, automotive, and packaging markets. General Scanning manufactures laser systems for the semiconductor, electronics, aircraft, and medical industries. The merged company will be called GSI Lumonics and will list on both the Toronto and NASDAQ stock exchanges. The two companies have yet to determine whether the merger will require any personnel or facilities changes.

In the face of the global turmoil caused by the Asian financial crisis, as well as an international downturn in the electronics and semiconductor markets, General Scanning had been looking for a way to thrive despite the turbulent business environment and its own disappointing financial results. The company reported a 12% decrease in sales in its third quarter (end-October).

General Scanning expects the Lumonics deal to strengthen its market position as a laser systems manufacturer, according to Victor Woolley, vice president of finance and CFO.

“Both (General Scanning and Lumonics) felt it was time to make a bold move and separate themselves from the pack in the laser systems business,” Woolley said. “The combined company now has sales of $300 million to $350 million. Our objective is to be able to offer the same customers a much broader line of products and to leverage our sales force.”

In recent months, General Scanning has been best known in medical imaging circles for its dispute with former manufacturing partner Voxel of Laguna Hills, CA. General Scanning won that fight and was awarded $1.9 million, which subsequently forced Voxel to file for Chapter 11 liquidation (SCAN 6/10/98). As it waits for its award from Voxel, General Scanning continues its other activities in medical imaging, primarily the development and manufacture of laser imagers, duplicators, and digitizers.

The company supplies OEM partner Imation of Oakdale, MN, with a film imager subsystem for Imation’s DryView 8700 dry-process laser printer. General Scanning has sold approximately 3000 to 4000 of the subsystems to Imation since the start of their agreement in 1995, according to Woolley, and expects to gain more market access as a result of Kodak’s pending acquisition of Imation (SCAN 8/19/98).

General Scanning also has an exclusive OEM agreement with Imation in which it supplies laser duplicator components for Imation’s 7000 Film Duplicator System, which makes film copies of analog x-ray films. Cleared by the Food and Drug Administration in January 1997, the product can function as a stand-alone unit or be added to the DryView 8700 Laser Imager or the DryView 8800 Multi-Input Manager.

General Scanning has also begun developing a line of x-ray film laser digitizers for teleradiology, called the LD2000 series. It will present the first of its product offerings in this line, LD2200, at the upcoming Radiological Society of North America meeting in Chicago. LD2200 received 510(k) clearance from the Food and Drug Administration in May. It can digitize a 14 x 17-inch, 2K x 2.5K film in 10 seconds. General Scanning plans to list the unit at approximately $24,500 and seeks to market the system through OEM partnerships with PACS and teleradiology firms.