Lumentum announced a deal to acquire NeoPhotonics for USD 918 million, strengthening its position in the optical components market. The company will pay USD 16 per share cash, a 39 percent premium on NeoPhotonics' last closing share price, and expects to achieve USD 50 million in synergies from the takeover within two years of closing.
The takeover gives Lumentum increased exposure to the industry transition to 400G optical networking, as well as photonics technology used by a growing number of industries, from automotive and manufacturing to healthcare and climate management. NeoPhotonics meanwhile will benefit from the increased scale of the group to support its R&D, manufacturing and sales.
The boards of both companies have approved the deal, and subject to regulatory approval, the acquisition is expected to close in the second half of calendar 2022.
Q3 results
The announcement coincided with NeoPhotonics' Q3 report. The company's revenues of USD 83.7 million were at the high end of the forecast range, up 29 percent quarter-over-quarter and down 18 percent year-over-year. NeoPhotonics achieved an adjusted operating profit of USD 1.3 million, compared to a loss of USD 10.3 million a year ago, and the net loss narrowed to USD 0.04 per share from USD 0.34.
For the same period, Lumentum reported revenues of USD 448.4 million, also better than forecast and up 14 percent on a sequential basis, but down 1 percent year-on-year. Net profit improved to USD 81.5 million from USD 67.1 million a year earlier.
