Luna selling High-Speed Optical Receivers business to MACOM for $33.5m

Luna Innovations Inc of Roanoke, VA, USA (which makes high-speed optoelectronics and fiber-optic test products for the telecoms industry and distributed fiber-optic sensing for the aerospace & defense and automotive industries) has agreed to sell its high-speed optical receivers (HSOR) business for $33.5m to MACOM Technology Solutions Holdings Inc of Lowell, MA, USA (which makes semiconductors, components and subassemblies for analog RF, microwave, millimeter-wave and photonic applications).

The purchase price includes $29.5m paid-in cash at closing plus $4m held in escrow until 15 December 2018 for possible working capital adjustments to the purchase price and potential satisfaction of certain post-closing indemnification obligations. Luna intends to use part of the proceeds to expand its fiber-optic sensing product range.

The sale includes the operations associated with Luna’s development, manufacturing and sales of products such as high-speed integrated coherent receivers and photodiodes. Luna originally acquired these operations as part of its merger with Advanced Photonix Inc (API) of Ann Arbor, MI, USA in May 2015. The assets and employees associated with Luna’s Terahertz operations are not transferred in this transaction.

“Since the merger with API, we have invested substantial time and resources into the HSOR business as a significant growth area,” notes Luna’s president & CEO My Chung. “As a result of that investment, we have developed leading products and technologies in that marketplace. MACOM has recognized the value that we have created in this space, and earlier this year approached us with this transaction opportunity,” he adds. “With their larger scale of operations, broader suite of product offerings and global footprint, we believe that MACOM provides a greater opportunity to drive long-term growth for the HSOR business, and the completion of this sale maximizes the value we would receive from the HSOR business.”

Employees associated with the HSOR operations and administration in in Ann Arbor will transfer to MACOM. The Picometrix line of high-speed optical receivers and optical-to-electrical converters serve the telecoms, data-center and manufacturing testing industries.

“Similar to our High Performance Analog and 25G laser products, Luna’s industry-leading high-speed optical receiver products and technology are well aligned with MACOM’s previously announced growth strategy in Cloud data centers and other high-speed networking markets, and we are excited to be able to add these products to our growing portfolio through this tuck-in acquisition,” says MACOM’s president & CEO John Croteau. “We expect the transaction to be neutral to accretive in the first year of combined operations, and to contribute meaningfully to growth in our fiscal year 2018,” he adds.

“We are especially grateful to the dedicated employees in the HSOR business whose skills and efforts have resulted in building this valuable business,” says Chung.