19 November 2014

MACOM acquiring BinOptics for $230m to complement opto IC portfolio

M/A-COM Technology Solutions Inc (MACOM) of Lowell, MA, USA (which makes semiconductors, components and subassemblies for analog, RF, microwave and millimeter-wave applications) has agreed to acquire BinOptics Corp of Ithaca, NY, USA (an ISO-certified merchant provider of indium phosphide lasers for data centers, mobile backhaul, silicon photonics and access networks) for $230m in cash (subject to customary post-closing adjustments).

The transaction is expected to:

• broaden MACOM's optical portfolio with highly differentiated edge-emitting and surface-emitting Fabry-Perot and DFB lasers;

• bring proprietary Etched Facet Technology (EFT) for lasers that enable wafer-scale economics in both device manufacturing and testing;

• double MACOM’s serviceable addressable market (SAM) within the optical component market; and

• expand growth opportunities and addressable market in data-center networks, including silicon photonics.

“This acquisition further extends MACOM’s preeminent position in what we expect will be a strong secular growth driver for many years to come,” says president & CEO John Croteau. “BinOptics’ wafer-scale model for indium phosphide lasers will play perfectly to our strength in compound semiconductor manufacturing, allowing us to quickly address what is currently a supply-constrained part of the optical component industry,” he believes. “BinOptics’ business model is consistent with our gross margin and operating margin aspirations, and we expect the transaction to be accretive to non-GAAP gross margin and EPS [earnings per share] within the first full quarter of combined operations,” he adds.

“This acquisition underscores MACOM’s strategy to expand our market and growth opportunities through mergers & acquisitions (M&A),” Croteau continues. “We have a successful track record of integrating acquisitions, both large and small, to expand our addressable market, while also achieving cost synergies for improved profitability and margin expansion.”

MACOM expects to fund the purchase price of the acquisition from a combination of cash on hand and incurring additional indebtedness from its existing $100m revolving credit facility.

Closing of the acquisition (which is expected by the end of MACOM’s fiscal first-quarter 2015, at end-December 2014) is subject to the satisfaction of customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

See related items:

BinOptics unveils 4x25G lasers for 100G data-center applications

Tags: M/A-COM BinOptics

Visit: www.binoptics.com

Visit: www.macomtech.com