Corning Proposes USD 305 Million to Acquire AFOP


Leading fiber optics and photonics products manufacturer Corning Incorporated announced its plan to acquire Alliance Fiber Optic Products, Inc (AFOP). Both companies announced today that they have entered into a definitive merger agreement under which Corning will take-over Alliance Fiber Optic Products, Inc. Corning will make an all-cash tender offer to acquire all of the outstanding common shares of Alliance Fiber Optic Products, Inc. (AFOP) for USD 18.50 per share, representing a transaction value of approximately USD 305 million.

AFOP designs and manufactures high-performance passive optical components. These products are used by cloud data-center operators and leading datacom and telecom OEMs (original equipment manufacturers). These components are used in several of Corning’s existing connectivity solutions. AFOP, founded in 1995 and headquartered in Sunnyvale, California, 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.”

The offer price represents a 32% premium to the one-month average closing price prior to the announcement and a 20% premium to the closing price on April 7, 2016. The tender offer is expected to commence within the next 10 business days and will be followed by a merger, in which all the shares of AFOP common stock that have not been tendered into the tender offer (other than shares for which appraisal rights have been properly exercised) will be converted into the right to receive $18.50 in cash per share.

The boards of directors of both companies have approved the transaction, which is expected to complete in the second quarter of 2016. The completion of the tender offer is subject to the satisfaction of customary closing conditions, including that a majority of the outstanding shares of common stock of AFOP (calculated on a fully diluted basis) are tendered into the tender offer and regulatory review.

Related News

SRN Acquires Fiber and Colocation Assets of Resurgence

Microsoft Plans Acquisition of Affirmed Networks

BT and Google Partners to Promote Cloud Gaming Platform Stadia

Orange Has a New Office for MEA Market

ZTE Expands European Presence Through Netgem


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.