Corning agreed to acquire Alliance Fiber Optic Products (AFOP) for $18.50 per share in cash, representing a transaction value of approximately $305 million.
AFOP, which is based in Sunnyvale, California designs and manufactures high-performance passive optical components that are used by cloud data-center operators and leading datacom and telecom OEMs (original equipment manufacturers). Corning uses AFOP products in a number of its existing connectivity solutions. AFOP was founded in 1995 and has manufacturing and product development capabilities in the U.S., Taiwan and China.
Upon closing of the acquisition, Corning will integrate AFOP into its Optical Communications business segment. Corning expects the acquisition to expand its market access to cloud data-center operators and OEMs, broaden its presence in Asia, and provide product and cost synergies. Corning expects the acquisition to be accretive to its earnings per share during the first year.
“Combining AFOP’s components expertise with Corning’s broad portfolio of connectivity solutions further strengthens our position in the high-growth, cloud data-center market segment,” said Clark S. Kinlin, executive vice president, Corning Optical Communications. “And, it adds additional products that Corning can offer our broad customer base while providing an opportunity for manufacturing synergies.”
Peter C. Chang, AFOP founder and CEO, commented, “We are excited to join forces with Corning. We believe Corning’s scale provides an excellent platform for our products to access a broader customer base and drive a higher level of growth than we would be able to achieve as a standalone company. Our board believes that this transaction is in the best interests of our stockholders and provides our stockholders with substantial cash value for their investment. In addition, we believe becoming part of a larger company with Corning’s strong track record benefits both our employees and customers.”
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