Photonic integrated circuit (PIC) manufacturer NeoPhotonics Corporation (NYSE:NPTN), which builds PIC-based modules and subsystems for bandwidth-intensive, high-speed optical communications networks, entered into a definitive purchase agreement with EMCORE Corporation (NASDAQ:EMKR) under which NeoPhotonics will purchase the assets of EMCORE's tunable laser and transceiver product lines for approximately $17.5 million, which consists of $15.0 million and a working capital and inventory adjustment of approximately $2.5 million. Consideration will be in the form of $1.5 million in cash plus the balance in a promissory note. The transaction is subject to customary closing conditions and is expected to close by early January 2015.
RELATED ARTICLE: GaSb/SOI PICs target integrated SWIR spectroscopy
"EMCORE's narrow linewidth tunable laser product line is highly complementary to our broad existing portfolio of optical components for 100 Gigabits per second coherent transport systems, and this acquisition significantly expands our footprint in this rapidly growing segment," said Tim Jenks, chairman and CEO of NeoPhotonics. "EMCORE's External Cavity Laser tunable laser has the narrowest linewidth in the industry, which we believe will become increasingly important for advanced modulation schemes at 400G and beyond. Combining this business into NeoPhotonics will allow us to provide customers with a full product suite that serves the entire coherent market," continued Jenks.
NeoPhotonics intends to add the EMCORE tunable lasers to its current product line and to continue to serve EMCORE’s current customers without interruption. EMCORE has supported these products from its facility in Newark, California and NeoPhotonics expects to integrate this business into in its existing Silicon Valley facilities. EMCORE’s revenue for this product line has been approximately $9 million per quarter. The acquisition is expected to be accretive to NeoPhotonics by the second quarter of 2015.
The assets to be acquired include production and development fixed assets, inventory and intellectual property for the ECL-based Integrable Tunable Laser Assembly (ITLA), micro-ITLA, Tunable XFP transceiver, tunable optical sub-assemblies and Integrated Coherent Transmitter (ICT) products for 10, 40, 100 and 400G telecommunications networks. The transaction also includes the acquisition of receivables and the assumption of certain production-related liabilities.
The company anticipates financial results for the third quarter ended September 30, 2014 to be revenue in the range of $80 to $82 million with 23 to 25% gross margin. The share count assumption used to estimate the third quarter is approximately 32.4 million diluted shares.
SOURCE: NeoPhotonics; http://www.neophotonics.com/news/newsneo_1980621.aspx