LightPath Technologies has entered into a definitive agreement to sell its wholly owned subsidiary in China, LightPath (Zhenjiang) Optical Instrumentation Co., Ltd., for $4.5 million. The transaction is a management buyout, with the purchaser being an entity owned by the subsidiary's current management team. This divestiture completes LightPath's transition to a fully Western-aligned manufacturing footprint. The purchase price will be paid in installments over five years, and the agreement includes provisions for the divested entity to continue supplying products to LightPath.
Key Details
- Transaction: LightPath will sell 100% of its interest in its Chinese subsidiary to Hengtu Optical Technology Co., Ltd., an entity owned by the subsidiary's current management, on July 23, 2026.
- Financial Terms: Total cash consideration is $4.5 million, payable in annual installments of at least $500,000 over a five-year period. The payments will include a 4% financing interest, with a 7% penalty rate on overdue amounts.
- Supply Agreement: The divested entity will continue as a third-party supplier to LightPath for a five-year term. The purchase price for these products will initially be cost-plus 10% and will increase in stages to cost-plus 30% as the purchase price principal is paid down.
- Additional Terms: LightPath will have the right to appoint a board observer at the divested company and has placed restrictions on any change of control until the purchase price is fully paid.