Comerica, East West Finance NeoPhotonics Acquisition
NeoPhotonics, a designer and manufacturer of photonic integrated circuit-or PIC-based modules and subsystems for bandwidth-intensive, high speed communications networks, announced it has completed the acquisition of the semiconductor optical components business unit (OCU) of LAPIS Semiconductor, a designer and manufacturer of high speed lasers, laser drivers, photodiodes and amplifiers for high speed networks.
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.
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.
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.”