Interlink Electronics (NASDAQ:LINK) shares tumbled 15% on Monday after the company disclosed it had entered into a non-binding letter of intent (LOI) relating to a potential strategic acquisition.
The target described in the LOI is a supplier of high-performance manufacturing solutions, according to Interlink. The prospective acquisition target serves customers across semiconductor, defense, laser and photonics, commercial high-tech, and aerospace sectors. Information provided to Interlink indicates the target produced in excess of $33 million in revenue and roughly $4 million of EBITDA for 2025.
Interlink said the contemplated transaction, if completed, would be financed with a mix of debt and equity issued to the sellers. The company specified that the equity consideration would be priced at the prevailing market price at the time of closing, but would be subject to a minimum price of $5.00 per share and a maximum price of $10.00 per share.
The company released a statement from its chief executive underscoring the strategic intent behind the LOI. "We are pleased to have entered into this non-binding LOI as we continue to evaluate opportunities that may support our long-term strategic growth objectives," Steven N. Bronson, CEO of Interlink, said. "If consummated, this potential acquisition would expand our capabilities and enhance our ability to serve customers in critical applications where precision, reliability, and performance are essential."
Interlink emphasized that the LOI is non-binding and that any transaction remains contingent on a number of customary conditions. These include completion of due diligence, negotiation and execution of definitive agreements, availability of financing, and receipt of required approvals. The company noted that the parties may terminate discussions at any time and that there is no assurance definitive agreements will be reached or that the transaction will close. Interlink also cautioned that final transaction terms could differ materially from those set out in the LOI.
The announcement linked the financing structure directly to the sellers, with equity subject to a market-based valuation but capped and floored within the stated range. Beyond the details disclosed about the target's 2025 revenue and EBITDA and the proposed funding mechanics, the LOI leaves open customary contingencies tied to diligence, definitive documentation, financing availability, and requisite approvals.
Context note: The company-provided financial figures for the target pertain to 2025 and are presented as information supplied to Interlink. No definitive agreement has been executed as of the LOI disclosure.