Vision M&A Report:
Metrology and Low-Light Vision to Grow

April 2024 – M&A trends, valuation multiples and transactions in the vision sector

Personal Note: Metrology and Low-Light Vision to Grow

Last year I highlighted in one of the ARTHOS M&A reports that vision markets in the non-visible light spectrums are outgrowing other market segments, and therefore, more M&A transactions were to be expected. This became true, and quite some vision M&A transactions in the areas of UV, X-ray, IR, and hyperspectral are highlighted in “Notable Deals”.

Arno Pätzold

Managing Partner ARTHOS
Expert in Sensors, Automation, Semiconductor & Photonics

arno.paetzold@arthos.de

Vision Metrology Leads Sub-Sector Growth and Valuations

In this report, I want to draw your attention to segments that are also expecting double-digit market growth: Metrology for semiconductor equipment low-light imaging, and space. Unfortunately, in my experience, it is difficult to identify reliable market reports for those vision market sub segments as related markets are small. Therefore, broader market trends need to be analyzed and factored in. E.g. Yole Group forecasts that “2024 will be a transition year for the semi-equipment subsystems market: revenue is not expected to decline as it did in 2023 … it will .. take several quarters and very likely most of 2024 to fully digest these high inventory levels, and to see all the equipment suppliers growing as strongly as we saw in 2021 or 2022.” This means double-digit growth and Valuations for Vision Metrology companies are reflecting this view by showing NTM EV/EBITDAmultiples of > 20! :

Capital IQ (as of 16 April, 2024)

Vision technology markets show strong growth across imaging and space applications

Market trends according to Spherical Insights, low-light imaging markets are expected to grow at a CAGR of 13.7% in a range of industries, including consumer electronics, security and surveillance, automotive, and medical. Breakthroughs in improving image quality are the main driver. Furthermore, the inclusion of AI, as well as the possibility of AR and VR applications, broadens market opportunities. Another example is the space industry. The World Economic Forum reveals a $1.8 trillion opportunity for global economic growth by 2035. In the coming years, space technology will help us monitor the effects of climate change, warn of impending natural disasters, and streamline the flow of global trade through more efficient supply chains, and vision technologies are a driving factor of that. Market opportunities are undoubtedly huge; in my view, the greater challenge is identifying attractive companies addressing these strongly growing vision segments.