Corning to grow datacenter market presence with AFOP acquisition
Corning expects the Alliance Fiber Optic Products acquisition to expand its market access to cloud datacenter customers.
Corning Incorporated (Corning, NY) (NYSE: GLW) and Alliance Fiber Optic Products (Sunnyvale, CA) (Nasdaq: AFOP) announced today that they have entered into a definitive merger agreement under which Corning will acquire Alliance Fiber Optic Products (AFOP).
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Under terms of the agreement, Corning will make an all-cash tender offer to acquire all of the outstanding common shares of AFOP for $18.50 per share, representing a transaction value of approximately $305 million.
AFOP designs and manufactures passive optical components. These products are used by cloud data-center operators and leading datacom and telecom OEMs (original equipment manufacturers). These components are used in several of Corning's existing connectivity solutions. AFOP, founded in 1995, has manufacturing and product development capabilities in the U.S., Taiwan and China.
Upon closing of the acquisition, Corning will integrate AFOP into its Optical Communications business segment. Corning expects the acquisition to expand its market access to cloud datacenter operators and OEMs, broaden its presence in Asia, and provide product and cost synergies.
Corning expects the acquisition to be accretive to its earnings per share during the first year.
"Combining AFOP's components expertise with Corning's broad portfolio of connectivity solutions further strengthens our position in the high-growth, cloud data-center market segment," said Clark S. Kinlin, executive vice president, Corning Optical Communications. "And, it adds additional products that Corning can offer our broad customer base while providing an opportunity for manufacturing synergies."
The boards of directors of both companies have approved the transaction, which is expected to be completed in the second quarter 2016. The completion of the tender offer is subject to the satisfaction of customary closing conditions, including that a majority of the outstanding shares of common stock of AFOP (calculated on a fully diluted basis) are tendered into the tender offer and regulatory review.