25 Oct 2002
TriQuint pays USD 40 million for the loss-making division and says that it will run it more efficiently.
Agere Systems, the semiconductor spin-off from Lucent Technologies, has found a buyer for its optoelectronics business. Triquint Semiconductor, US, is to pay USD 40 million in cash for a substantial portion of the unit.
The deal gives TriQuint access to an extensive line of Agere products including lasers, detectors, modulators, passive components, arrayed-waveguide gratings, amplifiers, transmitters and receivers.
Back in August, Agere announced that it wanted to exit the optoelectronics sector as part of a restructuring exercise (see related story) and it looks like TriQuint has picked up the loss-making business for a knock-down price.
"Clearly the market has been under a lot of pressure over the past two years, but we believe that this acquisition will position us for substantial revenue growth and profits when this market recovers," said Ralph Quinsey, chief executive officer of TriQuint. "The consolidation of the operations and the restructured workforce will greatly reduce our costs compared to Agere's previous experience." For the fiscal year ended 30 September 2002, the Agere unit achieved revenues of around USD 192 million.
The deal means that TriQuint will receive 300 of Agere's R&D, engineering and marketing staff as well as the latter's manufacturing plant in Brenigsville, Pennsylvania and test operations in Matamoros, Mexico. The transaction does not involve Agere's optoelectronic activities serving the CATV industry. A buyer is still being sought for that business.
Commenting on the deal, Jeremy Mills from the telecom analyst firm Porisma said: "At the end of day, if someone's prepared to take a loss-making business off you and pay cash for it then it can't be a bad thing. A company's only worth what someone's prepared to pay for it."
Oliver Graydon is editor of Optics.org and Opto & Laser Europe magazine.