M/A-COM Technology (MACOM) is getting deeper into the optical components market with the acquisition of BinOptics, a supplier of high-performance lasers for telecom and datacom applications, in an all-cash transaction valued at $230 million (€185 million).
MACOM believes it has spotted a gap in the market that developed over the last few years. As optical components and systems vendors have become increasingly vertically integrated, it has created a shortage of suppliers of lasers and transmitters.
The BinOptics acquisition will also double its addressable market within the optical component market and within China in particular, says MACOM. The vendor hopes to tap into growth opportunities in data centre networks, mobile backhaul and optical access, including silicon photonics.
“We believe 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,” said John Croteau, president and chief executive officer at MACOM.
In a corporate presentation about the transaction, MACOM describes BinOptics as “the largest pure-play laser supplier in the world” with more than 60 million lasers shipped to date. BinOptics’ customer list reads like a who’s who of transceiver vendors in the Asia Pacific region, where most of its customers are located, including Huawei, InnoLight, Source Photonics and Wuhan Telecommunication Devices.
Founded in 2000, BinOptics developed what the company calls Etched Facet Technology – an alternative to the conventional cleaving process used to separate individual lasers and create the output surface of the device. This proprietary process – currently used to manufacture edge-emitting and surface-emitting Fabry Perot and distributed feedback (DFB) lasers – allows several discrete components to be integrated onto a single chip. This allows wafer-scale economics in both device manufacturing and testing, which in turn make it possible to manufacture highly reliable, high-volume, and low-cost lasers, the company explains.
Another positive is that the acquisition is expected to improve MACOM’s gross margin and earnings per share from first full quarter of combined operations.
MACOM expects to fund the purchase with a combination of cash on hand and by tapping into an existing $100 million revolving credit facility. The transaction is expected to close in December 2014, subject to the customary closing conditions.
The company had previously acquired California-based communications chip vendor Mindspeed Technologies in December 2013 for $272 million (€219 million).
By Pauline Rigby
Press release: MACOM Announces Definitive Agreement to Acquire BinOptics Corporation