13th Oct 2022 11:23
(Alliance News) - Alphawave IP Group PLC on Thursday said it has bought Banias Labs for USD240 million, strengthening its potential USD300 million roadmap.
Banias Labs is an Israel-based optical digital signal processing chip, or DSP, developer for data centres.
London-based connectivity technology provider Alphawave said that the USD240 million acquisition will be funded from existing cash and additional financing.
This includes a USD210 million of senior secured credit facilities, comprising a five-year USD110 million revolving credit facility and a five-year USD100 million term loan.
Alphawave said the acquisition strengthens its roadmap of optical DSP silicon products for data centres, which is one of its core high growth markets.
Alongside the acquisition, Alphawave said it has negotiated a non-binding, multi-year purchasing framework with a "North American hyperscaler".
The agreement proposes a multi-year roadmap for Alphawave to develop and sell a portfolio of optical products and DSPs, including coherent DSP technology from Banias Labs.
The company added that sales from the agreement could amount to over USD300 million.
Looking ahead, Alphawave expects to ramp-up its new optical products in 2024 and profitability to improve from 2023 levels, as products go into high-volume production and generate additional revenue.
It added that trading in the third quarter of 2022 has been "strong". It expects to publish a trading update for the quarter on October 17.
Chief Executive Tony Pialis said: "This acquisition enhances our portfolio of electrical and optical solutions in the most advanced process technologies. The multi-year purchasing framework includes coherent optical solutions, and with the Banias acquisition, Alphawave is expanding its total addressable market by delivering next generation coherent optical solutions for the most advanced data centres."
Shares in Alphawave were down 1.9% to 113.79 pence each in London on Thursday morning.
By Sophie Rose; [email protected]
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