Inphi Corp. (IPHI) to Acquire ClariPhy Communications in $275M Deal

November 1, 2016 4:12 PM EDT
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Inphi Corporation (NYSE: IPHI) announced that it has signed a definitive agreement to acquire ClariPhy Communications Inc., a leading provider of ultra-high-speed systems-on-chip (SoCs) for multi-terabit data, long haul and metro networking markets for $275 million in cash as well as the assumption of certain liabilities at the close. The acquisition is expected to close in December of 2016, at which time ClariPhy's employees are expected to join Inphi.

"With the acquisition of ClariPhy, we are completing our product portfolio as the leading component and platform supplier for optical networking customers," said Ford Tamer, president and CEO of Inphi. "The ClariPhy coherent DSP complements Inphi TiA, driver, optical PHY and silicon photonics components to provide system OEM and module customers high-performance and low power platform solutions. Following closing, we expect to have platform offerings for long haul, metro, DCI edge, and intra-data center applications. We believe this will provide customers with faster time-to-market, proven quality, and competitive cost."

As the world turns toward optical networking, the ability to communicate in "coherent" DWDM technology over both long and short distances is becoming increasingly important. ClariPhy is one of only three merchant suppliers with this coherent DSP technology in the world today. On the product front, following closing, Inphi expects to be able to offer customers (1) coherent DSP, TiA, drivers for long haul, and metro, (2) direct detect PAM DSP-based solutions for DCI edge between data centers, and (3) NRZ and PAM short reach solutions for inside data centers. On the component front, following closing, Inphi expects to be able to offer TiA, driver, silicon photonics, coherent DSP, PAM and NRZ physical layer devices.

IHS estimates the total available market for 100G & 200G coherent optical network hardware will grow at 18% CAGR, from $3.2 billion to $7.4 billion, between 2015 and 2020. This growth will be driven by several concurrent, powerful tailwinds: the optical super cycle, a growing and expanding SAM (serviceable available market), opportunities in regions such as China and with new markets such as Cloud. Inphi believes that this acquisition will position the company to be one of the most comprehensive component and platform suppliers across all three optical market segments inside/outside data centers, metro and long haul.

Strong Additions to the Inphi Team Inphi enthusiastically welcomes the addition of the ClariPhy employees who are expected to join our team as a part of this acquisition. Nariman Yousefi, ClariPhy's current CEO is expected to join Inphi to run the Coherent DSP business unit. Additionally, the company's already strong design team is expected to be augmented by ClariPhy's well-known VP of Engineering and DSP architect, Oscar Agazzi.

Conference Call Today, Nov. 1, 2016, at 4:30pm EDT; 1:30pm PDT Inphi will host a conference call today, Tuesday, Nov. 1, 2016 at 4:30 pm EDT; 1:30 pm PDT to discuss the acquisition as well as our third quarter earnings results also published today. To access the conference call, please dial 1-844-459-2451; international callers should dial 765-507-2591, participant passcode is 98500691. A live and archived webcast and accompanying presentation of the conference call will be available in the Investors section of Inphi's website at www.inphi.com for up to 30 days after the call.

Further details of the transaction and arrangements are set out in Inphi's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2016.



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