EMCORE Corporation and Intel Corporation announced a definitive agreement for EMCORE to acquire the telecom-related portion of Intel’s Optical Platform Division for $85 million. The telecom assets to be acquired include intellectual property, assets and technology relating to tunable lasers, tunable transponders, 300-pin transponders and integrable tunable laser assemblies. The transaction is subject to regulatory review and certain other closing conditions, and is expected to close in the first quarter of 2008.
The acquisition will enhance EMCORE’s presence in the telecommunications market segment and expand its fiber optics product portfolio, allowing EMCORE to provide telecom customers with a more complete product offering.
“This transaction represents an important step for EMCORE,” said Reuben Richards, CEO, EMCORE. “We are excited about this acquisition and the opportunity to continue building upon Intel’s leading tunable laser technology, strong product quality and history of customer service and satisfaction. The acquired assets should drive substantial product cost reduction, and the combined product portfolio should enable EMCORE to gain a greater share of customer spending. EMCORE estimates these assets will generate $65 million of revenue in 2008, and believes this acquisition will accelerate its path to earnings per share profitability as expected in mid-2008.”
“The optical telecom components business continues to be an attractive market opportunity, but we believe this business and its assets are an optimal fit with EMCORE,” said Doug Davis, vice president, Intel Digital Enterprise Group, and general manager, Embedded and Communications Group. “The two companies will work together following the close of the transaction to complete a smooth transition of the business.”
The sale of these telecom-related assets enables Intel to focus its investments on core communications and embedded market segments in line with its platform strategies. In addition to this announced transaction, Intel is currently exploring strategic alternatives regarding the enterprise-focused portion of its Optical Platform Division.
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EMCORE is a leading provider of compound semiconductor-based components and subsystems for the broadband, fiber optic, satellite and terrestrial solar power markets. EMCORE has two operating segments: Fiber Optics and Photovoltaics. EMCORE’s Fiber Optics segment offers optical components, subsystems and systems that enable the transmission of video, voice and data over high-capacity fiber optic cables for high-speed data and telecommunications, cable television (CATV) and fiber-to-the-premises (FTTP) networks. EMCORE’s Photovoltaics segment provides solar products for satellite and terrestrial applications. For satellite applications, EMCORE offers high-efficiency compound semiconductor-based gallium arsenide (GaAs) solar cells, covered interconnect cells (CICs) and fully integrated solar panels. For terrestrial applications, EMCORE offers its high-efficiency GaAs solar cells for use in solar power concentrator systems.
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