TriQuint completed its purchase of a substantial portion of Agere Systems’ optoelectronics business on January 3, 2003, paying $40 million in cash. The transaction transferred optical-component products, technology, selected facilities and approximately 340 employees, but it did not include Agere’s California CATV transmission-systems operation.
What TriQuint acquired
The deal was a carve-out rather than a purchase of every Agere optoelectronics asset. The transferred portfolio covered a broad range of optical components and modules, including:
- Active and passive optical components
- Lasers, detectors and modulators
- Arrayed-waveguide components
- Optical amplifiers
- Transmitters, receivers, transceivers and transponders
- Microelectromechanical systems (MEMS)
The agreement covered products, related technology and some facilities. Agere’s CATV transmission-systems business in Alhambra and Irwindale, California, was expressly excluded.
Financial size of the acquired operation
Agere Systems reported approximately $198 million of revenue for the acquired business in its fiscal year ended September 30, 2002. That figure describes the business before the transaction and is not a projection of TriQuint’s future revenue.
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| Measure | Reported detail |
|---|---|
| Closing date | January 3, 2003 |
| Cash consideration | $40 million |
| Acquired-business revenue | Approximately $198 million for Agere’s fiscal year ended September 30, 2002 |
| Employees transferred | Approximately 340 |
| Employee locations | About 215 in Pennsylvania and 125 in Matamoros, Mexico |
Where employees and manufacturing moved
Pennsylvania operations
Approximately 215 employees in Pennsylvania transferred to TriQuint. A transitional manufacturing arrangement allowed Agere to continue supplying components for a short period after closing. TriQuint was expected to acquire Agere’s Breinigsville, Pennsylvania, facility after that transition.
Matamoros, Mexico
About 125 employees in Matamoros also joined TriQuint. The site provided back-end assembly and testing for the optoelectronics operation.
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Why Agere sold the business
Agere announced in August 2002 that it was seeking a buyer for all or part of its optoelectronics business. The planned sale formed part of a broader restructuring and an exit from that line of business. Consequently, TriQuint acquired a selected operating package while Agere handled other optoelectronics assets separately.
What happened to Agere’s remaining optoelectronics assets
Agere’s remaining West Coast optoelectronics operations were sold separately to Emcore for $25 million. That separate transaction helps explain why the TriQuint purchase price did not represent the value of Agere’s entire optoelectronics business.
TriQuint’s rationale at closing
TriQuint’s president and CEO, Ralph G. Quinsey, said the combination would make TriQuint “one of the world’s leading suppliers of optical modules and components.” The product breadth, transferred workforce and manufacturing footprint were intended to give TriQuint a larger position in optical components and modules.
Later ownership: sale to CyOptics
TriQuint did not retain the operation permanently. In 2005, CyOptics completed its acquisition of TriQuint’s optoelectronics operations for approximately $23.5 million in a combination of cash, equity and seller financing. The report identifies the business as the former Agere optical-components unit. TriQuint’s separate gallium-arsenide (GaAs) chips group was not part of that sale.
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Transaction timeline
- August 2002: Agere announced that it was seeking a buyer for all or part of its optoelectronics business as part of its restructuring.
- January 3, 2003: TriQuint completed the purchase of the selected optoelectronics assets and operations.
- 2005: Agere’s remaining West Coast optoelectronics operations went to Emcore, while CyOptics acquired TriQuint’s former Agere optical-components operation.
What the transaction means in context
The acquisition combined a relatively modest cash outlay with a business that had generated substantial prior-year revenue, but the comparison must be read carefully. TriQuint bought only a defined portion of Agere’s optoelectronics activities, assumed a transitional supply arrangement and received selected facilities and employees rather than the whole corporate product line. The subsequent CyOptics sale also shows that ownership of the acquired operation changed again within a few years.
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