EMCORE to sell majority interest in its fiber-optic business to Chinese company
Albuquerque, NM--EMCORE Corporation, a provider of compound semiconductor-based components, subsystems, and systems for the fiber-optic and solar-power markets, entered into a share purchase agreement to create a joint venture with Tangshan Caofeidian Investment Corporation (TCIC), a Chinese investment company located in Caofeidian Industry Zone, Tangshan City, Hebei Province of China. Caofeidian Industry Zone is a fast developing area in the strategic Bohai Rim Economical Region with a total investment of $26.4 billion, and hosts a large number of corporations and enterprises, including China Capital Steel, Sinopec, and others (see Emcore’s recent feature article “Photonic integration improves heterodyne photomixing terahertz sources”).
The agreement provides for TCIC to purchase a sixty percent (60%) interest in EMCORE’s Fiber Optics business (excluding its satellite communications and specialty photonics fiber optics product lines), which will be operated as a joint venture once the transaction is closed. The new joint venture entity will be named EMCORE Fiber Optics, Limited (EFO), and registered in Hong Kong. The agreement provides for TCIC to pay EMCORE approximately $27.8 million in cash and provide an additional funding of $27 million to EFO after the closing.
The Fiber Optics businesses included in this transaction are EMCORE’s telecom, enterprise, cable TV (CATV), fiber-to-the-premises (FTTP), and video transport product lines. EMCORE will retain the satellite communications and specialty photonics fiber optics product lines as well as the satellite and terrestrial solar businesses.
Over the next several years, the joint venture will focus on developing a high-volume, low-cost manufacturing infrastructure and a local customer support organization to better serve the expanding customer base in China and worldwide. Furthermore, TCIC has committed to providing additional funding support for the JV’s future strategic growth through acquisitions.
“EMCORE’s advanced technology, broad product portfolio, and high-quality customer base are very impressive. TCIC plans to provide a competitive fulfillment infrastructure and expand the JV’s customer penetration in Asia by strengthening the China operation.” Wenhong Tang, Vice Mayor of Tangshan City, said, “EMCORE’s Fiber Optics business is a great platform for future growth through accelerated new product development. We are committed to providing the resources needed to achieve this vision.”
In conjunction with the establishment of the joint venture, EMCORE and TCIC also entered into a supplemental agreement pursuant to which EMCORE agrees to establish its China terrestrial concentrator photovoltaics (CPV) manufacturing and operations base in Caofeidian Industry Zone.
--Posted by Gail Overton; [email protected]; www.laserfocusworld.com.