Wednesday, April 9, 2008

EMCORE to Acquire Intel's Enterprise and Storage Optical Assets

EMCORE Corporation agreed to acquire the enterprise and storage assets of Intel's Optical Platform Division as well as the Intel Connects Cables business. EMCORE will issue 3.7 million shares of restricted stock for the acquisition, currently valued at about $25.8 million. The transaction is expected to close in the second quarter of this year.

EMCORE said the deal further enhances its presence in the optical communications market segments, especially in the areas of 10 Gigabit Ethernet and storage area network transceivers.

"Following the successful acquisition of the telecom-related assets of Intel's Optical Platform Division, this second acquisition from Intel enables EMCORE's Fiber Optics to be a significant supplier for both telecom and datacom products," said Reuben F. Richards, Executive Chairman, EMCORE. "This acquisition will provide additional manufacturing efficiencies through economies of scale and vertical integration, benefiting our enterprise, storage, telecom, cable and high-performance computing customers. EMCORE projects this asset will add $45 million in revenue for the next 12 months, increase gross margin from 23 to 29 percent and be accretive to earnings. The Intel Connects Cables business provides an innovative solution for high-performance computing cluster interconnect applications, using embedded parallel optical transceivers with a multi-mode fiber ribbon. EMCORE expects this business to have gross margins exceeding 50% and to be the fastest growing segment of the acquired assets."

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.

Intel said the sale of these optical-related assets will enable it to focus its investments on core communications and embedded market segments in line with its platform strategies. Intel will continue its efforts on the universal serial bus 3.0 specification, which is slated to support optical, and silicon photonics research and development.http://www.emcore.com

  • In December 2007, EMCORE agreed to acquire the telecom–related portion of Intel's Optical Platform Division for $85 million. The telecom assets to be acquired included intellectual property, assets and technology relating to tunable lasers, tunable transponders, 300–pin transponders and integrable tunable laser assemblies. The deal closed in Q1 2008.

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