LaserBond's Technology Licensing Bet Is Starting To Pay Off

Fund managers say a Komatsu licensing deal and a cyclical recovery are validating a long-held turnaround thesis

31 May 2026 · 5 min read

DMX Asset Management's May 2026 monthly report captured the latest chapter in a long-running theme for LaserBond: a new CEO delivering encouraging updates while the company's technology licensing pipeline continues to build. The manager said incoming CEO Rob Freeman highlighted significant international growth opportunities for the product division, including new components designed for the oil and gas sector, while the services business benefits from a normalising equipment replacement cycle and improved efficiencies from recent machinery upgrades. With a $2.4 million Komatsu opportunity secured and further OEM deals in advanced negotiation, DMX said the interest clearly demonstrates the commercial value of LaserBond's technology and intellectual property.

That licensing story has been building for close to a year. Merewether Capital, in a February 2026 monthly report, said LaserBond delivered revenue up 13 per cent to $23.0 million and net profit up 117 per cent to $2.2 million, with the manager estimating the company could achieve $6 million to $7 million in net profit for the financial year against what it called a very reasonable multiple relative to the roughly $65 million enterprise value at the time. Underwood Capital had flagged the same Komatsu deal as a bigger validation point in a November 2025 update, noting that Komatsu has its own internal laser cladding capabilities, making its decision to turn to LaserBond's technology instead a significant endorsement of the company's capabilities.

Komatsu have their own internal laser cladding capabilities so for them to now turn to Laserbond's technology instead is a significant validation of LBL's capabilities.

— HD Capital Partners, Article, November 2025

A cyclical recovery investors were slow to recognise

Mereweather Capital, one of LaserBond's longest-holding shareholders, described the company's second half of FY25 as a record recovery in its July 2025 monthly report, with profit before tax of $3.7 million beating guidance of $2.4 million to $3.1 million. The manager said the investment thesis had always rested on the idea that beneath short-term cyclical headwinds, LaserBond had the characteristics it looks for: an aligned, founder-oriented management team with a long track record of growing an innovative product and service offering, even if extrapolating any single period for a business with inherent cyclicality and customer concentration carries its own risks.

HD Capital Partners went further in a detailed November 2025 profile, describing LaserBond as a company whose competitive edge stems not just from owning laser cladding equipment but from decades of accumulated expertise in tribology, proprietary material formulations and patented application techniques that are difficult for rivals such as Hardchrome Engineering to replicate. The manager noted the stock had fallen nearly 70 per cent from its peak, when it traded above 20 times earnings, before recovering to around 10 times earnings, arguing the market had been slow to recognise the recovery given the business's history of temporary, cyclical setbacks rather than structural decline.

What's driving the current re-rating

Merewether Capital's March 2026 update pointed to a further complication working in the company's favour over time: LaserBond's Services division, reliant on customers freighting heavy machinery for laser surface cladding, carries limited direct exposure to Middle East operations, insulating it from some of the fuel and logistics disruption facing other industrial names. Underwood Capital, meanwhile, has continued building its position through 2025 on the view that LaserBond was resuming its decade-long revenue compound annual growth rate of 16 per cent following a difficult investment phase that compressed margins.

What managers are watching next

With the Komatsu licence now converting into revenue and further OEM deals described as being in advanced negotiation, the key questions for managers are whether additional Technology segment licence sales materialise at a similar scale, whether the Gateway associate business, in which LaserBond holds a 40 per cent stake, continues its reported 24 per cent revenue growth, and whether new CEO Rob Freeman can sustain the operational momentum flagged across the Services and Products divisions.