CyOptics Buys TriQuint Optoelectronics

The former Agere photonics division is sold off to CyOptics, and the Breinigsville facility is sold as well

April 14, 2005

4 Min Read

HILLSBORO, Ore., and LEHIGH VALLEY, Penn. -- TriQuint Semiconductor, Inc. (Nasdaq:TQNT) and CyOptics, Inc., today announced that they have entered into an agreement for TriQuint to sell its optoelectronics operation in Breinigsville, Pennsylvania, and Matamoros, Mexico, to CyOptics, a private optical components manufacturer headquartered in Lehigh Valley, Pennsylvania. The sale is an asset sale including the products, manufacturing equipment, inventory, the Mexican entity, related intellectual property rights and other assets that constitute the operation that manufactures indium phosphide (InP) optical chips and components for the optical networking market. TriQuint will continue to support current optical customers and products based on gallium arsenide not associated with the operations in Pennsylvania and Mexico. CyOptics plans to employ the vast majority of TriQuint's approximately 100 employees in Pennsylvania and approximately 150 employees in Mexico.

Separately, TriQuint announced on March 11, 2005, it has entered into an agreement to sell its nearly 850,000 square feet optoelectronics facility and surrounding property in Breinigsville, Pennsylvania, to Anthem Partners, LLC, an affiliate of MRA Group of Plymouth Meeting, Pennsylvania. MRA intends to transform the existing facility into one of the Mid-Atlantic region's most advanced technology centers, featuring a combination of technology research and development, bio-medical engineering, high tech manufacturing, and a related education advancement and conference center. CyOptics will lease approximately 90,000 square feet of space in this facility for its operations once it has completed its purchase of the business from TriQuint.

Completion of both transactions is subject to customary closing conditions; TriQuint anticipates the sale to CyOptics will close by the end of April 2005 and the sale to Anthem by the end of May 2005.

Commenting on the sale, Ralph Quinsey, President and CEO, stated, "The TriQuint optoelectronics team should be acknowledged for the significant and successful restructuring effort they have completed in a very challenging environment. I am encouraged that the CyOptics team plans to hire the vast majority of our employees in Pennsylvania and Mexico, and plans to continue to support the product lines and our customers. The optoelectronics market will only support a few right sized and nimble players that are positioned for further investment in this market. Merging TriQuint's optoelectronics business with the privately held CyOptics provides a more optimal operating environment and return on investment horizon for the business. These agreements with CyOptics and with Anthem Partners create a stronger business unit able to invest in the future of optoelectronics."

Mr. Quinsey added, "TriQuint's total consideration from the sale of the building and the business will be approximately $32 million and will result in a one-time gain of between $7 million and $8 million. We will also receive a minority ownership share in CyOptics. We now intend to turn our full attention to our growing businesses in the wireless handset, base station, defense and wireless broadband access markets building on our portfolio of successful semiconductor and filter products."

Ed J. Coringrato, President and CEO of CyOptics, stated, "Industry consolidation is much needed and with this acquisition, CyOptics is well positioned with its cost structure, product portfolio breadth and expertise to serve the once again growing telecom equipment market. The combination of CyOptics and TriQuint's optoelectronics business makes the new CyOptics a top five supplier of InP optical chips and components. Our number one priority will be to continue to serve the existing TriQuint and CyOptics customer base with no interruptions and work closely with our customers on new sales opportunities. The TriQuint optoelectronics business is one of the best in the industry, with a rich history dating back to Bell Labs and Lucent Technologies, and our intention is to continue this proud tradition of innovation and customer service."

Larry Stuardi, President of MRA Group and partner and founder of Anthem Partners, stated, "I am extremely enthusiastic about this opportunity to redevelop this unique property into a state-of-the-art technology campus. This facility provides the Lehigh Valley an immediate ability to attract high growth emerging technology companies to the region, fostering the type of employment opportunities the Commonwealth of Pennsylvania and Lehigh Valley communities would most like to create. We plan to springboard off the optoelectronics engineering and manufacturing performed by CyOptics to attract other high technology research and development and manufacturing companies, as well as potentially utilizing the site to advance technology education and advanced learning. The property is a technological jewel and we are delighted to be able to lead its redevelopment for the benefit of the region."

TriQuint Semiconductor Inc.

CyOptics Inc.

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