Avago to Acquire JVP Portfolio Company CyOptics
Avago Technologies to Acquire CyOptics, a Leading Optical Chip and Component Supplier to the Datacom and Telecom Markets
SAN JOSE, Calif., SINGAPORE, and LEHIGH VALLEY, Pa., April 11, 2013
Avago Technologies Limited (AVGO), a leading supplier of analog interface components for communications, industrial and consumer applications, today announced the execution of a definitive agreement to acquire CyOptics, Inc., a leader in Indium Phosphide (InP) optical chip and component technologies for the data communications and telecommunications markets, for an aggregate acquisition price of approximately US$400 million in cash.
Avago believes the acquisition of CyOptics will strengthen Avago's fiber optics product portfolio for emerging 40G and 100G enterprise and data center applications. CyOptics' single-mode InP laser, receiver and photonics integration capability will help extend Avago's technology leadership position in these applications. Avago's optical transceiver products primarily leverage VCSEL-based technology today. In addition, the acquisition of CyOptics will facilitate Avago's establishment of a complementary optical components business, not only to serve growing segments of the access, metro and long-haul markets, but also for enterprise and data center segments.
CyOptics designs, fabricates and packages a broad portfolio of optical component products across enterprise, data center, access, metro and long-haul market segments. CyOptics' optical components are integrated into optical transceivers, transponders and line cards. Leveraging its Bell Labs and Lucent heritage, CyOptics has built a broad product portfolio and a customer base that includes the leading module and system OEMs.
CyOptics revenue has more than tripled over the past three years. During calendar year 2012, CyOptics net sales were approximately $210 million, up 21% from 2011.
"We believe CyOptics' leading InP technology and optical manufacturing capability will strengthen Avago's fiber optics portfolio and accelerate our ability to capture next generation 40G and 100G enterprise and data center sockets," stated Hock Tan, President and CEO of Avago. "With CyOptics, we also see interesting revenue growth opportunities in delivering a broad range of proprietary components to the market."
"We are delighted to join Avago Technologies, a company with a long history of innovation and a strong position in the wired infrastructure market. We believe this transaction presents tremendous opportunities for our customers and our employees," said Ed Coringrato, President and CEO of CyOptics. "I would also like to take this opportunity to thank our long standing investors, JVP and especially their founder, Dr. Erel Margalit, for their support and guidance over the past decade in building CyOptics into the significant industry participant it is today. My gratitude as well to our recent partners, TA Associates, for their vote of confidence and support"
Avago intends to fund the transaction with cash on-hand. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the United States, and is expected to close during Avago's third fiscal quarter of 2013.Cowen and Company LLC provided a fairness opinion to Avago Technologies and Latham & Watkins LLP is serving as the company's legal counsel. Raymond James & Associates, Inc. is serving as CyOptics' financial advisor and Goodwin Procter LLP is serving as the company's legal counsel.
About CyOptics, Inc.
Leveraging its Bell Laboratories heritage, CyOptics is a global technology leader in Indium Phosphide based optical components. CyOptics' products enable applications primarily in the Fiber-To-The-Home, Enterprise/Data Center and Long Haul/Metro segments of the communications network. CyOptics is a privately held company with major shareholders JVP and TA Associates