Corning and Alliance Fibre Optic Products have entered into a definitive merger agreement under which Corning will acquire Alliance Fibre Optic Products. Corning is making an all-cash tender offer to acquire all of the outstanding common shares of Alliance Fibre Optic Products, Inc. (AFOP) for $18.50 per share, representing a transaction value of approximately $305 million.
AFOP designs and manufactures high-performance passive optical components, which are used by cloud data-centre operators and datacom and telecom original equipment manufacturers. The components are used in several of Corning’s existing connectivity solutions. AFOP, founded in 1995 and headquartered in Sunnyvale, California, has manufacturing and product development capabilities in the US, Taiwan and China.
Corning will integrate AFOP into its Optical Communications business segment. Corning expects the acquisition to expand its market access to cloud data-centre operators and OEMs, broaden its presence in Asia, and provide product and cost synergies. Corning expects the acquisition to be accretive to its earnings per share during the first year. The boards of directors of both companies have approved the transaction, which is expected to be completed in the second quarter 2016.
“Combining AFOP’s components expertise with Corning’s broad portfolio of connectivity solutions further strengthens our position in the high-growth, cloud data-centre market segment,” said Clark Kinlin, executive vice president, Corning Optical Communications. “And, it adds additional products that Corning can offer our broad customer base while providing an opportunity for manufacturing synergies.”
Peter Chang, AFOP founder and CEO, commented, “We are excited to join forces with Corning. We believe Corning’s scale provides an excellent platform for our products to access a broader customer base and drive a higher level of growth than we would be able to achieve as a standalone company. Our board believes that this transaction is in the best interests of our stockholders and provides our stockholders with substantial cash value for their investment. In addition, we believe becoming part of a larger company with Corning’s strong track record benefits both our employees and customers.”
The offer price represents a 32% premium to the one-month average closing price prior to the announcement and a 20% premium to the closing price on April 7, 2016. The tender offer is expected to commence within the next 10 business days and will be followed by a merger, in which all the shares of AFOP common stock that have not been tendered into the tender offer (other than shares for which appraisal rights have been properly exercised) will be converted into the right to receive $18.50 in cash per share.
See more: www.opticalconnectionsnews.com/2016/04/corning-to-acquire-alliance-fibre-optic-products-inc.html
By Optical Connections News Team