1 May 2012

NeoPhotonics receives $39.8m strategic investment from RUSNANO

NeoPhotonics Corp of San Jose, CA, a vertically integrated designer and manufacturer of both indium phosphide (InP) and silica-on-silicon photonic integrated circuit (PIC)-based modules and subsystems for bandwidth-intensive, high-speed communications networks, has received an investment from RUSNANO, a $10bn sovereign investment corporation in Moscow, Russia.

Founded in March 2011 as an open joint stock company through a reorganization of the state corporation Russian Corporation of Nanotechnologies and owned by the Government of the Russian Federation, RUSNANO’s purpose is to develop the Russian nanotechnology industry through co-investment in nanotechnology projects with economic potential or social benefit.

RUSNANO acquired 4.97 million newly issued common shares of NeoPhotonics in a private placement transaction at a price of $8 per share for gross proceeds of $39.8m. The firm’s per-share closing trading price on 27 April was $4.49. The shares are restricted from resale pursuant to a lockup agreement for up to two years, at the end of which the firm is obligated to register the shares for potential resale. NeoPhotonics has also appointed RUSNANO’s managing director Sergey Polikarpov to its board of directors.

“We welcomed this investment as it aligns with our strategy to accelerate growth globally, with particular emphasis on fast-growing and emerging markets, including in Russia and the CIS [Commonwealth of Independent States] countries,” says NeoPhotonics’ chairman, president & CEO Tim Jenks.

“Not only are these markets deploying high-speed, agile and fiber-to-the-home [FTTH] networks but we are also seeing more of our customers target service providers and invest locally in Russia and more broadly in Eastern Europe,” he adds. “We started to see and investigate this growth opportunity several years ago, and we added sales capability in the region and have since been engaged with and supplying several customers in Russia. With the planned support from RUSNANO, we believe that NeoPhotonics is well positioned to capitalize on new and greater opportunities in the region,” continues Jenks.

“One of the unique advantages of NeoPhotonics is its vertically integrated design and manufacturing processes for photonic integrated circuit-based products,” notes Polikarpov. “The company’s planned research and production facilities in Russia are intended to be able to perform a wide range of steps from PIC development to processing and fabrication... with our support in Russia, we can further enhance the company’s development cycles and shorten the time for broader adoption for NeoPhotonics products in Russia and the global market,” he believes.

NeoPhotonics intends to use a portion of the net proceeds from the sale of the shares for general corporate purposes as well as to establish design and production capabilities in Russia for the benefit of the global organization. The expansion in Russia is targeted for completion by end-July 2014, and is not expected to have a material impact on results of operations in 2012.

See related items:

NeoPhotonics reports record revenue of $57.2m in Q4

NeoPhotonics grows margin in Q3 despite 16% revenue drop to $44m

NeoPhotonics’ revenue grows 14% year-on-year to record $52.1m

Tags: NeoPhotonics PICs

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