Maryland-based American Capital purchases IST

CNY Business Journal (1996+), Jun 11, 2004 by Dickinson, Casey J

BIG FLATS - Imaging and Sensing Technology Corp. (IST) is under new ownership. Last month, American Capital Strategies, Ltd. (ACS) purchased more than 90 percent of IST from its four founders in a $44.5 million deal. The stock purchase involved a combination of loans, warrants, subordinated debt, preferred stock, and common equity. IST designs, manufactures, and distributes equipment used in the nuclear-power industry.

IST began as a part of a larger industrial company. In 1988, four Westinghouse Corp. managers - Philip Ponzi, Roy Kyles, David Dalrymple, and Louis Binetti - purchased Westinghouse's nuclear-detection division. The four men decided to exit the business as they approached retirement age.

"The founders had decided that this was the right time," says John Kennedy, director of corporate services for IST.

Ponzi served as chairman and chief executive officer, Kyles as president, and Dalrymple and Binetti were executive vice presidents at IST. Former chief operating officer Donald W. Hartman became chief executive officer when the sale closed May 25.

Planning for the sale of the company began one year ago, says Kennedy, while the ACS transaction took five months to assemble.

IST has three core business lines, Kennedy explains. The company's sensing systems detect thermal, radiation, and electrical energy. Its imaging-systems line produces video equipment for use in nuclear-plant inspection, and IST's spectraltechnologies group produces specialized lighting products used for scientific research. The company's products originated in the 1970s, says Kennedy, and have been continually improved over the past three decades.

IST products are found in the majority of the world's commercial reactors, according to the company. General Electric, Westinghouse, and Combustion Engineering plant designs incorporate IST equipment, as do Japanese-, Korean-, and French-designed nuclear plants.

Nuclear power provides 16 percent of the world's energy needs. Equipment in each plant is periodically replaced as part of regular safety shutdowns, says Kennedy.

Other, industrial plants such as steel mills also incorporate IST technology.

Located in the Airport Corporate Park in Big Flats, IST occupies three buildings with approximately 100,000 square feet.

Two of the buildings are used for manufacturing, while IST's administrative offices occupy the third. The company employs 275, including 117 in Big Flats. IST also has operations in Ontario, Buffalo, and Puerto Rico, as well as sales offices in Ohio, Illinois, and Washington State.

ACS expects IST's business to grow in the coming years, says Kennedy. The company plans to sell more equipment in the growing Asian energy market, he adds. Fuel demands of growing economies, such as that of China, are a factor in the recent rise in petroleum prices.

"We will be out looking for new business," says Kennedy.

Maryland-based American Capital Strategies is a publicly traded fund with $2.7 billion in resources. The fund's portfolio includes New Piper Aircraft Corp., Riddell Sports Group, Inc., and Escort, Inc. ACS has invested more than $3 billion since 1997. ACS has offices in Bethesda, Md., New York, San Francisco, Dallas, Chicago, Los Angeles, and Philadelphia.