News

27 October 2010

 

Source Photonics sold to Francisco Partners for $146m

MRV Communications Inc has agreed to sell its optical communications component manufacturing subsidiary Source Photonics Inc of Chatsworth, CA, USA to global technology-focused private equity fund Francisco Partners for $146m ($113m in cash and $33m in assumed debt and certain deductions). Payment will be made in installments within 60 days of closing.

Source Photonics designs and manufactures products including passive optical network (PON) subsystems, optical transceivers used in the enterprise, access and metropolitan market segments, and optical subsystems used in fiber-to-the-premise (FTTP) deployments (for telecom service providers to deliver high-bandwidth video, voice and data services).

“This transaction illustrates our strategic shift away from fiber-optic components and our increased emphasis on providing optical networking products, services and solutions,” says MRV’s CEO Dilip Singh. “Moreover, this transaction will help stabilize revenue and operating income, allowing us to concentrate on maintaining steady cash flows from our core business units and growing the business to meet customer demand,” he adds. “Source Photonics will continue normal operations while benefiting from Francisco’s expertise in the technology and telecommunications industries,” Singh concludes.

“Source Photonics provides a powerful value proposition to its Tier 1 customers with its substantial China cost base, advanced technical capabilities, and high-growth business model,” says Source Photonics’ CEO Near Margalit. “Francisco Partners’ experience in the optical component space and in growing technology companies will help accelerate the next phase of Source’s growth, and we consider the investment a strong validation of our business strategy,” he adds.

“Francisco Partners has been engaged in the optical component space for many years,” says Keith Geeslin, a partner at Francisco Partners. “Source is a truly differentiated platform for growth and profitability in the optical component space, and look forward to partnering with the management team to grow Source into one of the top global vendors for optical components.”

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Visit: www.sourcephotonics.com

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