MACOM jumps into TOSAs/ROSAs with FiBest acquisition

M/A-COM Technology Solutions Holdings, Inc. (MACOM; NASDAQ: MTSI) (MACOM) says it will expand its optical communications activities through the acquisition of FiBest Ltd. The Japanese company, which makes transmit optical subassemblies (TOSAs) and receive optical subassemblies (ROSAs), will cost MACOM approximately $60 million, or 2.4X trailing 12-month revenue, in cash.

The EML-based TOSAs and APD and PIN/APD ROSAs displayed on FiBest's website are 10-Gbps devices. However, MACOM described its new acquisition as a market leader in 100-Gbps optical subassemblies, with additional related technology in development. The potential new assets therefore will not only expand MACOM's addressable market within the data center realm but strengthening its play in 100G, 200G, and 400G fiber-optic network applications, the company believes. It also improves MACOM's position in Japan; while MACOM now sees about 5% of its revenues from sales in that country, FiBest derives 50% of its revenues from its home country.

MACOM also expects the deal to be accretive to adjusted earnings per share.

"The FiBest acquisition augments MACOM's preeminent position in optical networking components, adding high-performance packaging capability. This will enable us to deliver more refined and validated component solutions to our transceiver customers," explained John Croteau, MACOM's president and CEO. "The quality of the optical subassembly is a major factor in achieving the performance, power efficiency, and cost targets necessary for 100G in data centers – and becomes mission critical at 200G and 400G data rates. Adding FiBest will significantly expand MACOM's addressable market with high growth potential for 100G in data centers, as we anticipate an inflection point in demand in 2017."

MACOM says it will close the sale in its first fiscal quarter of 2016, which ends on January 1, 2016.

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