IPG Photonics sells Russian operations for $51M

IPG Photonics announced that it has sold its entire interest in its Russian subsidiary, IRE-Polus. The purchaser is a group led by Softline Projects and current management of IRE-Polus. The sale marks the finalization of IPG’s exit from all facilities in Russia, following imposed sanctions on trade after the start of the war with Ukraine. The proceeds from the transaction are $51M before advisory and other fees. The company expects that the sale will reduce third quarter revenue as compared to previously provided guidance by approximately $5M. IRE-Polus revenue accounts for less than 5% of IPG’s full-year revenue. Related to the transaction, the company expects to record total estimated charges of $195M to $210M. Of these total estimated charges, $60M to $65M relates to the carrying value of net assets of IRE-Polus that is in excess of net proceeds received on the sale and $135M to $145M relates to the cumulative translation adjustment component of other comprehensive income that is included in shareholders equity. The company does not expect to provide any further information regarding the transaction until it reports earnings results for the third quarter.