Lumentum Holdings and NeoPhotonics Corporation have announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for US$16.00 per share in cash, which represents a total equity value of approximately US$918 million. The transaction has been unanimously approved by the Boards of Directors of both companies.
Lumentum says the addition of NeoPhotonics expands its opportunity in some of the fastest growing areas of the more than US$10 billion market for optical components used in cloud and telecom network infrastructure. It adds that the integrated company will be better positioned to serve the needs of a global customer base who are increasingly utilising photonics to accelerate the shift to digital and virtual approaches to work and life, the proliferation of IoT, 5G, and next-generation mobile networks, and the transition to advanced cloud computing architectures
“With NeoPhotonics, we’re making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics is at the forefront of favourable long-term market trends,” said Alan Lowe, Lumentum president and CEO. “At the centre of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets. Adding NeoPhotonics’ differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions.”
“We are confident this transaction will make us an even better partner to our customers, while enabling our team to deliver significant, long-term value to our stockholders. We look forward to welcoming NeoPhotonics’ talented team of employees to Lumentum,” concluded Lowe.
“Today’s announcement is an exciting milestone for NeoPhotonics,” said Tim Jenks, NeoPhotonics president, CEO, and chairman. “The increasing global demand for our ultra-pure light tunable lasers and photonics technologies for speed over distance applications is more apparent than ever, and Lumentum is the ideal partner to serve our customers on a larger scale. Lumentum recognises the importance of NeoPhotonics’ differentiated photonic technology and products, which are well positioned for accelerated growth in the coming years. The combination’s complementary product portfolio, increased scale, breadth of customer application knowledge, and R&D capabilities will accelerate innovation, better serve customers, and deliver significant and immediate value to our stockholders. Importantly, this transaction is a testament to the hard work and dedication of our employees. I look forward to working with Lumentum leadership to ensure a smooth transition as we begin an exciting new chapter as one company.”
Lumentum says the combination accelerates its exposure to and penetration of some of the fastest growing portions of the more than US$10 billion market for optical components used in cloud and telecom network infrastructure. Internet, cloud, mobile, and broadband access network capacity requirements continue to grow at an unrelenting pace driven by the digital transformation of work and life, high-bandwidth video, gaming, and other applications. The combined company will have a broader portfolio of next generation products and technologies addressing the market opportunity created by the strong growth in network capacity requirements created by these applications.
The purchase price represents a premium of approximately 39% to NeoPhotonics’ closing stock price on November 3, 2021. Lumentum intends to finance the transaction through cash from the combined company’s balance sheet.
The transaction is expected to close in the second half of calendar year 2022, subject to approval by NeoPhotonics’ stockholders, receipt of regulatory approvals, and other customary closing conditions.
For more information, visit www.lumentum.com