On April 7, Corning announced it entered into an agreement to acquire Alliance Fiber Optic Products Inc. (AFOP) in a deal valued at $305 million. Founded in 1995 and headquartered in Sunnyvale, CA, AFOP designs and manufactures passive optical components. “These products are used by cloud data center operators and leading datacom and telecom OEMs [original equipment manufacturers],” Corning said, adding, “These components are used in several of Corning’s existing connectivity solutions.” AFOP has manufacturing and product-development capabilities in the U.S., Taiwan, and China.
The companies expect the deal to be completed in the second quarter of 2016, and Corning said it will integrate AFOP into its Optical Communications business segment. Corning said it “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.”
Clark S. Kinlin, executive vice president of Corning Optical Communications, commented, “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. And it adds additional products that Corning can offer our broad customer base while providing an opportunity for manufacturing synergies.”
AFOP founder and chief executive officer Peter C. Chang said, “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.”
Corning’s all-cash tender offer of $18.50 per share represents a 20-percent premium over the April 7 closing price, and a 32-percent premium over the one-month average closing price. Both companies’ boards of directors have approved the transaction.
