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Nathanial Electronics sold; locals jobs safe

VERGENNES — New signs will soon pop up outside the Panton Road headquarters of 30-year-old Vergennes technology firm Nathaniel Electronics.
Firm founder Joel Melnick, 59, on April 5 sold the privately held engineering and manufacturing firm he founded in 1987 to laser maker Necsel IP Inc.
Necsel’s parent company is Japanese firm Ushio America Inc., and Melnick said his firm — which specializes in designing and building lighting for fiber-optic cables as small as 2 millimeters in diameter that are used in surgical procedures and automated manufacturing — has a strong existing relationship with its new, larger partners.
“We’ve worked with Ushio for over 10 years. This came out of long-term relationships. We got to know them, and they got to know us,” Melnick said, adding that those Panton Road signs will state “Ushio.” “They’ve shown to be honorable people, good people.”
The deal — financial terms of which were not disclosed — preserves Nathaniel’s 15 onsite employees (another six engineering consultants have working relationships with the company) and their Panton Road workplace, and installs Melnick as the company’s general manager for the next five years.
In fact, Melnick said he is seeking to increase the number of Nathaniel’s Panton Road engineers from five to eight.
“We’re hiring a quality engineer, a mechanical engineer and an electrical engineer,” he said. “We’re actively looking for candidates.”
According to the press release, Ushio, headquartered in Cypress, Calif., is “a leading manufacturer of specialty and general illumination lighting solutions,” and Necsel “develops and manufactures lasers and laser solutions for the projection, endoscopes, bio instrumentation, industrial and life sciences marketplaces.” That work is similar to Nathaniel’s.
Nathaniel has experimented with different products over the years, including solar panels and bow-mounted rangefinders, but Melnick said the company has more recently refocused on its original and core product line of medical lighting.
The company’s first major product provided lighting for arthroscopes used in joint surgery or inspection. Now, Melnick said Nathaniel’s laser-based lights may be found on surgical instruments for many other procedures — he describes them as “high complexity medical illuminators” in the press release.
“In medical there’s a whole class of endoscopes that are being made smaller. So when they go into your lungs, the smaller the endoscope the deeper they can go into your lung,” he said. “In urology, size there is very important. So that kind of work, having small cameras and small-camera illumination, that’s what we’re focused on.”
Nathaniel has also used similar fiber-optic lighting technology to branch out into automated manufacturing.
“Right now a lot of manufacturing has automated processes or automated inspection. And to do that they use cameras as powerful as computers. And the lighting is very critical. And we’re in that part of the market where you use fiber-optic light into small places, places where they put optics in the end of the fibers,” he said. “It’s a way to find a way of expansion of lighting products, where lighting is very critical. Inside the body is dark, so you have to have light, and when you’re doing measurements with cameras, lighting is very critical.”
Teaming up with Necsel/Ushio makes sense, Melnick said, for a number of reasons, one of which is that the move will help open up markets for Nathaniel’s products. 
To start with, he described Ushio as “a $1.9 billion company.”
“We wanted to bring a lot of capital into the business, because a lot of the products we make require development of anywhere from six months to more than a year,” Melnick said. “So it really helps to have capital so you can embark on these long projects.”
Secondly, telling potential customers, “I’m from Ushio,” should help get their attention.
“Really large companies, multi-billion-dollar companies, they would prefer to deal with companies that are large rather than as small as Nathaniel was. So it really helps us to get in the door in certain places. And Ushio has a worldwide presence, and they’re a Japanese company,” Melnick said. “So there will be a lot of connections.”
Melnick has also, of course, been in charge of Nathaniel himself for three decades. He said he is grateful for help from the National Bank of Middlebury, Addison County Economic Development Corp., Vermont Community Loan Fund, Small Business Administration and Vermont Economic Development Authority for their support over the years. He added each “significantly helped while we consummated this deal.”
And after almost 30 years — September would be exactly 30 years — Melnick can now take a deep breath.  
“When you own it yourself, there’s this really high risk-reward thing going on. I think the risk part of it gets to you after a while. You have to keep betting on yourself a lot. I think it was time to join up with someone really large and increase our chances of success,” Melnick said. “It’s much less risk to me. It’s just trying to be really good at my job and trying to grow this company.”
Andy Kirkaldy may be reached at [email protected].

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