MACOM to add laser technology via BinOptics acquisition

M/A-COM Technology Solutions Holdings, Inc. (NASDAQ: MTSI) (MACOM) has agreed to acquire InP laser developer BinOptics Corp. for $230 million in cash. MACOM expects to close the deal during its first fiscal quarter of 2015 (which ends January 2, 2015), subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Privately held BinOptics offers both edge-emitting and surface-emitting Fabry Perot and DFB lasers (see, for example, "BinOptics launches 25G CWDM lasers for 100G interconnection"). In the former category, it leverages its proprietary Etched Facet Technology to create lasers that are easily connected to wafer-level components. The company has positioned these lasers as complementary to silicon photonics efforts, among other applications (see "BinOptics touts silicon photonics advances").

MACOM says the acquisition will double its serviceable addressable market within optical components; it already offers optical communications ICs, transimpendance amplifiers, and drivers via its acquisitions of Mindspeed (see "MACOM expands 100G play with Mindspeed acquisition") and Optomai (see "M/A-COM and GigOptix settle lawsuits"). The company expects its new assets will prove accretive to gross margin and earnings per share starting in the first full quarter of combined operations. It described BinOptics as "a leader within the Chinese optical communications industry" in a presentation describing the transaction.

"This acquisition further extends MACOM's preeminent position in what we expect will be a strong secular growth driver for many years to come," said John Croteau, MACOM president and CEO. "We believe BinOptics' wafer-scale model for Indium Phosphide lasers will play perfectly to our strength in compound semiconductor manufacturing, allowing us to quickly address what is currently a supply-constrained part of the optical component industry. BinOptics' business model is consistent with our gross margin and operating margin aspirations, and we expect the transaction to be accretive to non-GAAP gross margin and EPS within the first full quarter of combined operations."

MACOM will use a combination of cash on hand and a dip into its existing $100 million revolving credit facility to fund the deal.

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