IPG Photonics Sells Russian Operations
IPG Photonics has sold its interest in its Russian subsidiary, IRE-Polus, in a sale that marks the finalization of the laser maker's exit from all facilities in Russia following imposed sanctions on trade after the start of the war with Ukraine. IPG completed the sale to a group led by Softline Projects LLC and current management of IRE-Polus. The proceeds of the transaction stand at $51 million before advisory and other fees.
“Our team executed flawlessly to transition our manufacturing operations after the war’s outbreak without any impact to our customers," said Mark Gitin, who was named CEO of IPG Photonics in April and assumed the position from company co-founder Eugene Scherbakov in June.
"Our ability to respond to adverse events out of our control highlights the resilience of the company as we were able to lean on our global manufacturing capabilities to increase production in Germany, the U.S., and Italy and start production in Poland,” Gitin said. IPG also recently announced plans to build a 37,300 sq ft production facility in Canada.
IPG suspended capital investment in Russia following the start of the war in Ukraine. In addition to working to increase capacity and inventories of critical components outside Russia, IPG, in 2022, said it had started qualifying third-party components suppliers in order to reduce its reliance on its Russian operations.
IPG’s Russian operations had supplied components for its major facilities in Germany and the U.S., as well as finished products for the Chinese market.
IPG expects the sale to reduce its third quarter revenue as compared to its previously provided guidance by approximately $5 million. IRE-Polus revenue accounts for less than 5% of IPG’s full-year revenue.
IPG was founded in Russia by physicist and laser expert Valentin Gapontsev in 1990.
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Published: September 2024
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