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Emcore Corp of Albuquerque, NM, USA, which makes components and subsystems for the broadband, fiber-optic and solar power markets, has agreed to acquire the enterprise and storage assets of Intel’s Optical Platform Division as well as the Intel Connects Cables business. In exchange, Emcore will issue 3.7 million shares of restricted stock (with certain adjustments based on its stock price 12 months after the transaction’s close, which is expected in second-quarter 2008).

The assets include intellectual property, inventory, fixed assets and technology relating to optical transceivers for enterprise and storage customers, as well as optical cable interconnects for high-performance computing clusters.

Emcore says that the acquisition further enhances its presence in the optical communications market segments, especially in 10 Gigabit Ethernet and storage area network transceivers, and allows it to provide a more complete product offering to a broad range of customers.

After completing the acquisition of the telecom-related assets of Intel’s Optical Platform Division in February, this second acquisition from Intel makes Emcore’s Fiber Optics segment a significant supplier for both telecom and datacom products, says executive chairman Reuben F. Richards. “This acquisition will provide additional manufacturing efficiencies through economies of scale and vertical integration, benefiting our enterprise, storage, telecom, cable and high-performance computing customers,” he adds. Emcore projects that this asset will add $45m in revenue for the next 12 months, increase gross margin from 23% to 29%, and be accretive to earnings.

“The Intel Connects Cables business provides an innovative solution for high-performance computing cluster interconnect applications, using embedded parallel optical transceivers with a multi-mode fiber ribbon,” Richards continues. Emcore expects this business to have gross margins exceeding 50% and to be the fastest-growing segment of the acquired assets.

“Customers are driving consolidation and vertical integration in the optical communications market segments,” says Doug Davis, VP of the Intel Digital Enterprise Group and general manager of the Embedded and Communications Group. “We will work together to complete a smooth transition of these businesses, building upon the experience in the telecom optical components acquisition.”

Intel says that the sale of these optical-related assets enables it to focus its investments on core communications and embedded market segments in line with its platform strategies. The firm will continue its efforts on the universal serial bus 3.0 specification, which is slated to support optical, as well as silicon photonics R&D.

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