NeoPhotonics to acquire Santur

SAN JOSE, USA: NeoPhotonics Corp., a leading designer and manufacturer of photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high speed communications networks, and Santur Corp., a leading designer and manufacturer of Indium Phosphide (InP) based PIC products, have entered into a definitive agreement under which NeoPhotonics will acquire privately held Santur.

Santur is a world leader in high-performance tunable laser arrays for metro and long-haul DWDM systems and a leading developer of PIC-based products for 40Gbps and 100Gbps client side and coherent line side applications.

NeoPhotonics has agreed to pay an estimated $39.2 million in cash for Santur, after deductions for closing costs and other adjustments, plus up to $7.5 million additional cash contingent on the financial performance of Santur products subsequent to closing of the transaction through the end of 2012.

Founded in November 2000, Santur is a private company located in Fremont, California, and is focused on commercializing PIC-based laser array and packaging technologies for communications. Santur’s technology includes established telecom designs offering elegant approaches to wide tunability as well as high speed transceivers. The company’s products are designed to provide reduced size, power consumption and cost for a wide range of DWDM, Coherent and Client Side networking applications in 10G, 40G and 100G networks.

“Santur has developed innovative indium phosphide (InP) based photonic integration products that are critical elements in 100G coherent transmitters and that complement the NeoPhotonics PIC-based 100G coherent receiver product line,” said Tim Jenks, chairman and CEO of NeoPhotonics. “By combining active InP PICs from Santur with our hybrid PICs, we can provide our customers with new products for 100G coherent systems that feature higher levels of integration, higher performance and greater functionality. Furthermore, Santur’s advanced tunable laser products also fit with our Speed and Agility product lines, enabling us to provide customers more complete solutions for reconfigurable networks.”

“In addition, Santur is a leading provider of PIC-based 40 and 100 Gbps transceiver modules for client side and data center applications. NeoPhotonics recently entered this new and rapidly growing market segment with its first products. By combining Santur’s products, roadmap and strong customer positions with the NeoPhotonics portfolio of products, vertically integrated and high volume manufacturing capabilities, and complementary customer set, we intend to further develop our 100G coherent line side products and rapidly establish NeoPhotonics as a major vendor of client side components for the cloud,” concluded Jenks.

“Our InP PIC technologies form the foundation for our line of innovative products that we have successfully developed and sold to leading customers around the world. We believe that the combination of our technology and products with complementary technology and products from NeoPhotonics can provide compelling value to our customers. This is a case of the sum being much greater than the parts, and we believe that NeoPhotonics represents an excellent strategic fit for Santur,” said Paul Meissner, president and CEO of Santur.

Santur generated revenue of approximately $21 million for the six months ending June 30, 2011. It plans to provide addition financial information relating to Santur along with guidance for the fourth quarter of 2011 when NeoPhotonics releases its financial results for the third quarter of 2011. The board of directors and stockholders of Santur have each approved the transaction. The parties expect the transaction to close in the fourth calendar quarter of 2011.