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Date: 22-11-16

RF and opto expert MACOM gets into digital by acquiring Applied Micro

RF and optical physical layer chip expert MACOM to acquire 64-bit ARM processor core based computing and networking chip maker Applied Micro Circuits Corporation for approximately $8.36 per share, consisting of $3.25 in cash and 0.1089 MACOM shares per share of AppliedMicro. MACOM to divest the compute business of Applied Micro within the first 100 days of closing.

MACOM finds AppliedMicro’s connectivity business a highly complementary to its product portfolio by addition of OTN framers, MACsec Ethernet networking components and the Applied Micro's leading single-lambda PAM4 platform. AppliedMicro’s single lambda PAM4 solution is expected to become industry standard for enterprise and Data Center connectivity.

Through this deal MACOM to grow faster in cloud computing and datacentre market.

John Croteau, President and Chief Executive Officer said, "This transaction will accelerate and expand MACOM’s breakout opportunity in Enterprise and Cloud Data Centers. MACOM will now be able to provide all the requisite semiconductor content for optical networks - analog, photonic and PHY - from the switch to fiber for long haul, metro, access, backhaul and Data Center. AppliedMicro’s 100G to 400G single-lambda PAM4 platform should perfectly complement MACOM's leadership in analog and photonic components for Data Centers.

“AppliedMicro also provides value-added technologies including SerDes, high speed analog-to-digital and digital-to-analog converters with industry-leading engineering competencies and long product lifecycles. Importantly, we expect that this transaction will establish MACOM with an incumbent position supplying strategic components and enterprise and cloud Data Center customers.”

MACOM intends to divest AppliedMicro’s well-positioned Compute business within 100 days from closing the transaction, as the business does not strategically align with MACOM’s long-term focus. AppliedMicro has been exploring strategic options for the Compute business and there is known strategic interest among several potential buyers and investors. MACOM will continue to support Compute customers and partners during this transition.

“This is an exciting day for AppliedMicro, and we are pleased to be joining forces with MACOM. The transaction affirms the value that our employees have created and provides a strong path forward for our Connectivity business while delivering AppliedMicro stockholders a robust premium,” said Paramesh Gopi, President and CEO, AppliedMicro. “This transaction will create an industry powerhouse with the scale, deep customer relationships, innovative technology, and enabling products that will help deliver explosive growth in Enterprise and Cloud Data Centers. In addition, this agreement provides a promising path forward for the Compute business, which is in the process of bringing AppliedMicro’s highly-competitive third-generation X-Gene processor to market. X-Gene is well-positioned to address the large opportunity for mainstream server processors with its proven high performance cores, scalable interconnect and high per socket memory capabilities.”

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