TriQuint acquires Agere's optoelectronics business
The transaction includes products, technology and some facilities related to Agere s optoelectronics business, which includes lasers, detectors, modulators, passive components, arrayed waveguide-based components, amplifiers, transmitters, receivers, transceivers, transponders and MEMS. The agreement does not include Agere s CATV (cable television) transmission systems business, which is based in Alhambra and Irwindale, California. Agere is continuing to pursue a buyer for this business.
TriQuint has recently been snapping up selected technology from companies as part of its future growth strategy, including Infineon’s GaAs IC business and selected parts of IBM s SiGe IC business.
In the September 2002 quarter, Agere s optoelectronics revenues declined to $38 million from $62 million in the previous quarter. Sales around the $40 million mark are predicted for the December quarter.
For Agere s fiscal year ended September 30, 2002, the business TriQuint is acquiring had revenue of approximately $192 million. TriQuint estimates the business will generate between $50 million and $75 million in revenue for calendar year 2003, and is projecting that it will add to TriQuint s earnings per share by the fourth quarter of 2003.
As part of the deal, approximately 300 Agere staff working in R&D, process engineering, marketing, product management and assembly and will join TriQuint. The companies anticipate closing the sale in early January 2003, subject to regulatory approval and other customary closing conditions.
"I am delighted that we have been able to reach agreement with Agere to acquire this business," said Ralph Quinsey, president and CEO of TriQuint. "It s a natural fit for TriQuint as we have been involved in the design and production of ICs and products for the optical networking business for over 15 years, and it is a core part of our company."
According to Quinsey, the acquisition makes TriQuint one of the world s leading suppliers of optical modules and components. "Clearly the market has been under a lot of pressure over the past two years, but we believe that this acquisition will position us for substantial revenue growth and profits when this market recovers," he said. "The consolidation of the operations and the restructured workforce will greatly reduce our costs compared to Agere s previous experience. We are extremely excited about this opportunity."
Through a transitional manufacturing agreement, Agere will supply components for TriQuint for a short period following the close of the transaction to ensure continued service to customers. Agere currently manufactures the majority of its components in a facility at Breinigsville, PA that TriQuint will acquire following the transition period. TriQuint will also acquire the back-end assembly and test operations at Agere s Matamoros, Mexico facility.
"The sale of our optoelectronics business will allow us to squarely focus on providing advanced chips for wireless networks, multi-service networking and high-density storage applications," said Sohail Khan, executive VP of Agere s Infrastructure Systems Group. "We will work closely with TriQuint to ensure a smooth transition for our optoelectronics customers, most of whom we will continue to serve as an IC supplier."