The LGL Group, Inc., a holding company, engages in services, merchant investment and manufacturing business activities.
The company's approach is to establish long-term partnerships utilizing the resources of the organization to facilitate a full cycle of advice and investment to augment investments in conjunction with broader capital syndication. This approach allows the company to be creative and nimble, with no pre-determined exit timetable. The company focuses on businesses with existing gr...
The LGL Group, Inc., a holding company, engages in services, merchant investment and manufacturing business activities.
The company's approach is to establish long-term partnerships utilizing the resources of the organization to facilitate a full cycle of advice and investment to augment investments in conjunction with broader capital syndication. This approach allows the company to be creative and nimble, with no pre-determined exit timetable. The company focuses on businesses with existing growth potential, which through helping improve their capabilities, teaming up portfolio companies for strategic expansions, and transforming the businesses through merger and acquisition opportunities.
Business Strategy
Across all of its businesses, the company's success is based on a simple formula: it seeks to find undervalued companies in the Graham & Dodd tradition, a methodology for valuing companies that primarily looks for deeply depressed prices. The company owns a controlling interest in Piezo Technology, Inc. (‘PTI’), which started out as an investment position and ultimately became an operating subsidiary before the Separation.
The company's Electronic Instruments business, Precise Time and Frequency, LLC (‘PTF’), employs a market-based approach of designing and offering new products to its customers through both organic research and development, and through strategic partnerships, joint ventures, acquisitions, or mergers. The company seeks to leverage its core strength as an engineering leader to expand client access, add new capabilities, and continue to diversify its product offerings.
A key driver of value is the Merchant Investment business, which utilizes various structures and vehicles to build shareholder value, including certain special purpose vehicles.
This direct investment effort includes the development of various vehicles designed to leverage the company’s broad investment network. LGL Systems Acquisition Holding Company, LLC (‘LGL Systems’), a partially owned subsidiary of the company, serves as the sponsor of certain direct investing efforts. LGL Systems' first vehicle, LGL Systems Acquisition Corporation, was a special purpose acquisition company, commonly referred to as a ‘SPAC’ or blank check company, formed for the purpose of effecting a business combination in the aerospace, defense, and communications industries (‘LGL I’). LGL I was a publicly traded company on the NYSE American under the ticker symbol ‘DFNS.’ In 2023, the company launched Lynch Capital International, LLC to facilitate the Merchant Investment business.
Segments
The company operates through two segments, Electronic Instruments and Merchant Investment.
Electronic Instruments
The Electronic Instruments segment is operated through the company's wholly owned subsidiary, PTF, a globally positioned producer of industrial electronic instruments and commercial products and services. PTF operates from the company's design and manufacturing facility in Wakefield, Massachusetts. PTF is focused on the design and manufacture of high-performance Frequency and Time reference standards that form the basis for timing and synchronization in various applications, including satellite communication, time transfer systems, network synchronization, electricity distribution, and metrology. PTF offers customers frequency reference and time standard synchronization solutions tailored to meeting performance requirements. PTF has developed a comprehensive portfolio of time and frequency instrumentation, including frequency standards, time standards, and time code generators, complemented by a wide range of ancillary products, such as RF distribution amplifiers, digital distribution amplifiers, time code distribution amplifiers, and redundancy switches. Thousands of instruments have been delivered to a broad range of applications worldwide, from simple network time servers to synchronize local computers and instruments, to fully redundant and highly sophisticated satellite communications and broadcast systems. Military applications, include synchronization of mobile Satcom terminals, high-performance sources for calibration, and test equipment providing the ultimate in frequency stability and phase noise performance.
Merchant Investment
The Merchant Investment segment consists of various investment vehicles in which the company has a shareholder, partner, or general partner interest, and through which it invests its capital. As the company continues to assess further acquisitions of, or investments in, operating businesses broadly, it seeks to invest available cash and cash equivalents with a view to enhancing returns. The company's core strengths include identifying and acquiring undervalued assets and businesses, often through the purchase of securities, increasing value through management, financial or other operational changes, and managing complex legal, regulatory, or financial issues.
Businesses
Electronic Instruments segment
Products
PTF's products range from simple, and frequency solutions to premium products designed to deliver maximum performance for the most demanding applications. PTF's products include frequency and time reference standards; radio frequency (‘RF’), digital, and optical time code distribution amplifiers; redundancy auto switches; and network time protocol (‘NTP’) servers, all of which are used in a wide range of applications worldwide.
PTF's frequency and time reference standards include quartz frequency standards, global positioning system (‘GPS’) / global navigation system (‘GNS’) frequency and time standards, and rubidium atomic frequency standards. The de facto standard for many highly demanding applications, such as satellite communications, is PTF's range of GPS/GNS disciplined quartz frequency and time standards. The MtronPTI high-quality quartz oscillators utilized within the PTF instruments deliver outstanding phase noise and short-term stability performance for applications where low noise is paramount. This outstanding short-term performance, coupled with the long-term stability and accuracy of the external GNS reference signals, which can be from GPS, Galileo, Glonass, or QZSS, provides the user excellent all-around performance that is highly cost-effective.
When two or more computers are involved, accurate timekeeping is a challenge, especially when the computers are in different locations. PTF's range of GNS time and frequency references and network time servers deliver a high level of performance that allows customers to synchronize to Coordinated Universal Time (‘UTC’), in several cost-effective forms to meet a multitude of time and frequency reference requirements. Applications range from low phase noise, highly stable and accurate system frequency references for satellite communications (‘SATCOM’) and digital broadcasting applications, to computer networks, shipboard time code references, and e-commerce time stamping applications. With respect to UTC, the company has developed long-term real-time synchronization capability of less than 10 nanoseconds, of which multiple systems have been delivered to date.
PTF's portfolio of distribution amplifiers covers multiple signal types, including high frequency (‘HF’), RF, digital, time code, optical, and custom configured units. The distribution range is designed to complement the high quality of the frequency and time references and provide the most effective cost/performance solution for the application, including options for full remote monitoring/control (including RF analog signal monitoring) and optional level control.
The distribution product range includes standard units with either 12 or 16 channels, together with more flexible units that allow the user to define specific configurations, including different types of input/output signals combined into a convenient 1U or 2U package with up to 36 output channels.
PTF's series of redundancy auto switches range from simple level detection to highly sophisticated sensing capability, extremely fast switching options, and full Ethernet connectivity, to provide remote monitoring/control, and including integration with simple network management protocol (‘SNMP’) management systems. The most recent model includes multi-channel input capability, as well as the ability to switch up to three input types of signals.
Customers
PTF primarily works directly with original equipment manufacturers (‘OEMs’) to define the right solutions for their unique applications, including the design of custom parts with unique part numbers. The company's franchised representatives/distributors have highly skilled sales engineers who work directly with designers and program managers, providing a high level of engineering support at all points within the process.
Marketing and Sales
Marketing efforts are supported by outsourcing to independent contractors and include the company's website, targeted monthly marketing emails, and exhibiting at relevant shows and conferences. The company has a highly skilled team of domestic sales representatives and international distributors who market and sell its products. Where possible, the sales team endeavors to gain qualification of specific products from systems integrators, confirming suitability for use in a specific system design. Through direct contact with clients and through its representative network, the company is able to understand the needs of its customers, and then provide custom configurations to meet those requirements in a highly cost-efficient solution.
Merchant Investment segment
Special Purpose Vehicles
In 2019, LGL management began pursuing the development of special purpose vehicles (‘SPV’) to pursue acquisitions of varying scale, with emphasis on the manufacturing sector of the economy, which provides fertile opportunities for growing the intrinsic value of the enterprise.
Government Regulations
As a supplier to certain U.S. Government defense contractors, the company must comply with certain procurement regulations and other requirements. Maintaining registration under the System for Award Management (‘SAM’) is critical in order to receive U.S. Government contracts. As a small business, the company obtains preferential treatment for awards from tier one Government contractors; however, to maintain this position, it is required to submit annually ‘Representation and Certification’ documents attesting to its size, revenue, and internal controls for anti-discrimination, avoidance of counterfeit components, and a number of other federally mandated issues. In particular, for international business, the company is required to submit a request for Automated Export System (‘AES’) validation used by U.S. Government agencies to measure the compliance of U.S. exports with U.S. export control laws.
History
The company was founded in 1917. It was incorporated in 1928. The company was formerly known as Lynch Corporation and changed its name to The LGL Group, Inc.
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