Friday, December 21, 2007

Intel Sells off Telecom Optical Platform Assets to Emcore

Emcore Corp. and Intel Corp. have announced a definitive agreement for Emcore to acquire the telecom-related portion of Intel’s optical platform division. The acquisition will enhance Emcore’s presence in the telecommunications market and expand its fiber optics product portfolio, allowing Emcore to provide telecom clients with a broader product lineup. The sale of the division will allow Intel to concentrate on its core initiatives.

Under the terms of the transaction Intel will receive $85 million. The telecom assets to be acquired include intellectual property, assets and technology relating to tunable lasers, tunable transponders, 300-pin transponders and integrable tunable laser assemblies. The transaction is subject to regulatory review and certain other closing conditions, and is expected to close in the first quarter of 2008.

“The optical telecom components business continues to be an attractive market opportunity, but we believe this business and its assets are an optimal fit with Emcore. The two companies will work together following the close of the transaction to complete a smooth transition of the business,” said Doug Davis, vice president, Intel digital enterprise group, and general manager, embedded and communications group.

The sale of these telecom-related assets enables Intel to focus its investments on core communications and embedded market segments in line with its platform strategies. In addition to this announced transaction, Intel is currently exploring strategic alternatives regarding the enterprise-focused portion of its Optical Platform Division.

“We are excited about this acquisition and the opportunity to continue building upon Intel’s leading tunable laser technology, strong product quality and history of customer service and satisfaction. The acquired assets should drive substantial product cost reduction, and the combined product portfolio should enable Emcore to gain a greater share of customer spending. Emcore estimates these assets will generate $65 million of revenue in 2008, and believes this acquisition will accelerate its path to earnings per share profitability as expected in mid-2008,” said Reuben Richards, chief executive of Emcore.

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