NeoPhotonics Announces Definitive Agreement to Acquire the Semiconductor Optical Business Unit of LAPIS Semiconductor
Adds Key Capabilities for Data Rates of 100G and Beyond
Strengthens NeoPhotonics Solutions for High Speed Telecom and Datacom Applications
Expands Broad Materials Platform for PIC Integration
Strengthens Existing Customer Base in Critical Japan Market
Provides Entry in to High-Speed Semiconductor IC Market
Significantly Expands Intellectual Property with over 150 Patents and Patent Applications
SAN JOSE, Calif.--(BUSINESS WIRE)-- NeoPhotonics Corporation (NYS: NPTN) , a leading designer and manufacturer of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high speed communications networks, today announced it has entered into a definitive agreement to acquire the semiconductor optical components business unit (OCU) of LAPIS Semiconductor Co., Ltd. LAPIS Semiconductor is a wholly-owned subsidiary of ROHM Co. Ltd. OCU is to be acquired by NeoPhotonics Semiconductor GK, a Japanese subsidiary of NeoPhotonics.
Today's rapidly accelerating demand for bandwidth is driving increasing needs for capable, scalable telecommunication networks. These advanced network systems are increasingly relying upon photonic integration technologies based on advanced components and scalable device integration approaches. This transaction is intended to further accelerate the development of NeoPhotonics Photonic Integrated Circuit (PIC) technology by coupling complex optical devices and analog semiconductor ICs within the same platform. In addition, the NeoPhotonics technology portfolio would expand to include high speed semiconductor devices for signal generation and amplification, which are designed to enable advanced modulation methodologies, enhanced performance, and reduced power consumption in communications networks.
"We are excited about signing this definitive acquisition agreement as LAPIS Semiconductor OCU is a leading provider of high speed devices for communications," said Tim Jenks, NeoPhotonics Chairman and CEO. "LAPIS Semiconductor OCU provides a broad range of lasers, drivers, and detectors for high speed 100G applications. We believe the company's technologies are well-suited for data rates in optical networks beyond 100G as well. We also believe this acquisition can enhance our ability to provide customers with innovative and technologically advanced optical communication products, which can benefit our customers as they strive to accelerate the delivery of scalable high speed and high bandwidth connectivity.
"The transaction is a natural step in the relationship between NeoPhotonics and LAPIS Semiconductor OCU, as the businesses have been collaborating closely on high speed coherent technology development for the past four years. Further we plan to leverage our existing sales channels after the acquisition, as the two businesses serve many common customers. The transaction will provide NeoPhotonics with revenue from OCU's advanced lasers and drivers used in many of today's 100G client-side data transmission modules," concluded Mr. Jenks.
NeoPhotonics Semiconductor GK, an indirect wholly-owned subsidiary of NeoPhotonics Corporation, has agreed to pay approximately $36.8 million in cash, which is comprised of approximately $21.2 million in cash, before adjustments for the business unit and an additional $15.6 million over three years for the associated real estate. The acquisition agreements provide for the purchase of the LAPIS Semiconductor OCU business, together with a portfolio of more than 150 patents and patents applications, its campus and high speed semiconductor and laser and detector fabrication facility. Payments will be made in Japanese Yen. Following completion of the transaction, NeoPhotonics intends to combine and operate the business as NeoPhotonics Semiconductor GK in its current location near Tokyo, Japan.
The LAPIS Semiconductor OCU business is a leader in high speed semiconductor and high speed laser and photodetector devices for communications networks. The company's, lasers, photodetectors and analog semiconductor integrated circuits (ICs) are critical elements of coherent and other high speed optical transmission devices. OCU was an early innovator in high speed optoelectronics and the business today is among the leading producers of both analog electronic ICs and photonic solutions for the current generation of 100G modules used in accelerating deployments.
The LAPIS Semiconductor OCU business unit is not a standalone company; therefore historically it has not prepared separate financial statements, and audited financial information for the business unit is not yet available. Based on preliminary unaudited pro forma financial information provided by management of LAPIS Semiconductor, OCU had revenue of approximately $45 million for the first nine months ended September 30, 2012. For the same period, approximately 30% of revenue attributable to OCU was from network equipment manufacturers that are also customers of NeoPhotonics, approximately 6% of revenue attributable to OCU was from NeoPhotonics, and the remainder attributable to OCU was from other optical module manufacturers and test and measurement customers. Based on company estimates, the addition of OCU is expected to be accretive to the company's Adjusted EBITDA within the first year following the transaction. Following the consummation of the sale transaction, NeoPhotonics will file with the Securities and Exchange Commission the required historical and pro forma financial results reflecting the acquisition.
The board of directors of each company has approved the transaction. The parties expect the transaction to close in the second quarter or sooner.Completion of the transaction is subject to various customary closing conditions.
NeoPhotonics will host a conference call at 8:00 A.M. Eastern Standard Time on Tuesday, January 22, 2013. The public is invited to listen to a live webcast of the conference call on the Investor Relations section of the company website at http://ir.neophotonics.com. The conference call can be accessed by dialing 877-419-6603 if you are calling from within the United States or 719-325-4874 if you are calling from outside the United States. The passcode for the call is 8045463. A replay of the webcast will be available on the Investor Relations section on the company's website approximately two hours after the conclusion of the call.
NeoPhotonics is a leading designer and manufacturer of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high-speed communications networks. The company's products enable cost-effective, high-speed data transmission and efficient allocation of bandwidth over communications networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2000 certified engineering and manufacturing facilities in Silicon Valley (USA) and Shenzhen, China. NeoPhotonics has been included in the Russell 3000® Index since June 2011. For additional information, visit www.neophotonics.com.
About LAPIS Semiconductor
LAPIS Semiconductor is a leading total-silicon solutions provider in the ever-expanding digital communications market. LAPIS Semiconductor has the expertise and experience in technology development and products manufacturing to support a wide array of customers and a multiplicity of customer demands. As the result of the highly synergetic union with ROHM Co., Ltd. in 2008, LAPIS Semiconductor continues to support the new digital future by developing and providing innovative products to the market. For additional information, visit www.lapis-semi.com.
© 2013 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of applicable securities laws. Statements that are not historical facts, including statements about our beliefs, expectations and future performance, are forward-looking statements. The use of any of the words "intend", "believe", "may", "would", "will", "expect", "anticipate", "estimates", and similar expressions are intended to identify forward-looking statements. In particular, forward looking statements in this press release include, but are not limited to, the anticipated timing of the completion of the transaction; the impact of the transaction on NeoPhotonics, including the anticipated benefits and costs, of the proposed acquisition; future opportunities for NeoPhotonics and the LAPIS Semiconductor OCU business unit; suitability of OCU's technologies for next-generation networks; market and industry trends; and the plans, strategies and objectives of management for future operations.
The foregoing forward-looking statements are based on NeoPhotonics' current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, the risk that the acquisition will not close or that closing will be delayed; the risk that integrating OCU's technology, employees or operations may be more difficult, time-consuming or costly than expected; the risk that OCU's or the NeoPhotonics business may not perform as expected due to transaction-related uncertainty or other factors (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers); uncertainties related to customer demand and the ability to develop technologies and match production with customer demands; pricing trends and fluctuations in the semiconductor industry; cost increases; the impact of recent uncertainty and volatility in global economic conditions and in the telecommunications and semiconductor industries; natural disasters, civil unrest, acts of terrorism, or other supply chain disruptions; and other risks and uncertainties listed in the recent Form 10-Q filed by NeoPhotonics Corporation with the U.S. SEC on November 9, 2012, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and NeoPhotonics and Rohm Semiconductor undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
JD Fay, Chief Financial Officer
Sapphire Investor Relations, LLC
Erica Mannion, Investor Relations
LouVan Communications Inc.
Michael Newsom, Public Relations
KEYWORDS: United States Asia Pacific North America California Japan
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