NeoPhotonics Completes Acquisition of the Semiconductor Optical Business Unit of LAPIS Semiconductor
March 29, 2013
•Adds Key Capabilities for Data Rates of 100G and Above
•Expands Broad Materials Platform for PIC Integration
•Strengthens Existing Customer Base in Important 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.--March 29, 2013 -- NeoPhotonics Corporation (NYSE: 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 that it has completed the acquisition of the semiconductor optical components business unit (OCU) of LAPIS Semiconductor Co., Ltd., a leading designer and manufacturer of high speed lasers, laser drivers, photodiodes and amplifiers for high speed networks. OCU was previously the component division of OKI Electric for high speed lasers and high speed III-V amplifiers before it was acquired by ROHM Semiconductor in 2008. As of the closing, the OCU business was merged into and now operates as NeoPhotonics Semiconductor GK, a Japanese subsidiary of NeoPhotonics.
“We are pleased to have closed the previously announced acquisition of the optical components unit of LAPIS Semiconductor in accordance with our purchase agreement and earlier than planned,” said Tim Jenks, Chairman and CEO of NeoPhotonics. “We look forward to this expansion of our 100G product suite, our further strategic expansion into the Japan market, the addition of new global network equipment and module customers, and expanding our business opportunities with our current mutual customers.”
On March 29, 2013, NeoPhotonics paid approximately $10.2 million in cash for the business of OCU, after adjustments, and approximately $3.7 million in cash as the first of four equal payments for the associated real estate. In the transaction, NeoPhotonics also assumed employee retirement obligations of approximately $6.5 million and compensation obligations of approximately $0.6 million. The total consideration for the real estate including the payment made upon the closing is approximately $14.6 million with the balance payable over the next three years. Including the future payments for real estate, the total purchase price is approximately $35.2 million. The purchase consideration is paid in Japanese Yen.
On March 21, 2013, NeoPhotonics entered into a syndicated Revolving Credit and Term Loan Agreement with Comerica Bank, as administrative agent and lead arranger. East West Bank has also become a lender under this facility. NeoPhotonics borrowed $28 million under the term loan facility and $12 million under the revolving credit facility to refinance existing company indebtedness of approximately $20.9 million and help finance the OCU acquisition and related transaction expenses.
Anticipated OCU Financial Impact
Prior to the closing, the LAPIS Semiconductor OCU business unit was 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 the management of LAPIS Semiconductor, OCU had revenue of approximately $45 million for the first nine months ended September 30, 2012. 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. Given that the acquisition closed in the first fiscal quarter for NeoPhotonics, transaction related expenses, which are expected to be in the range of $3 million to $4 million, are expected to be incurred in the first quarter.
NeoPhotonics plans to provide an update on the OCU business, now NeoPhotonics Semiconductor GK, when it releases its quarterly financial results for the first quarter of 2013, which is currently expected to be in the first half of May 2013. The company is also preparing the required historical and pro forma financial results reflecting the acquisition and plans to file the information with the Securities and Exchange Commission within the next 75 days, or by June 12, 2013.
NeoPhotonics is a leading designer and manufacturer of photonic integrated circuit, or PIC,
based optoelectronic 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), Japan and China. For additional information, visit