Yesterday, Vuzix announced the completion of the sale of its business assets which comprised the Company’s Tactical Display Group. They are well known for the development and manufacture of individual displays used in a variety of programs.
Essentially, TDG is purchasing itself from Vuzix for $8.5 Million plus possible and the two firms have agreed to a 10 year non-compete with a possible $2.5 Million earn-out provision if certain conditions are met within the next year. However, the non-compete isn’t absolute. According to Market Watch, “TDG LLC has agreed to become the exclusive authorized reseller of the Company’s existing and new video eyewear products into the global Military and Defense markets. Additionally Vuzix is still allowed to perform its historically successful engineering services work on its new waveguide based video eyewear technology directly for customers within the Military and Defense markets. Any new products that the Company creates under its permitted ongoing engineering services and research programs with the US Government and other Defense organizations worldwide are to be exclusively marketed by the TDG LLC in the Military and Defense markets, unless the TDG LLC elects to have Vuzix do the same.”
All-in-all it looks like a great deal for Vuzix and a not-so-great deal for TDG. Interesting, considering over the past few years, it seems as most of the heavy lifting has been accomplished by the TDG business unit. Notice that the most lucrative elements of the business seem to remain the property of Vuzix. Additionally, none of the company’s ‘key personnel’ will be leaving to the new TDG but rather will remain with Vuzix. In fact, about a year ago, industry insiders predicted such an action as a means to save Vuzix at the cost of TDG. It will be interesting to see how TDG fairs over the next few years as defense spending radically changes.
