Koch Optics has announced it is acquiring optical components maker Oplink for $445 million, a bid that sent Oplink shares soaring by more than 13% today, but also comes amid a months-long fight between Oplink and an activist shareholder group.
The buyer, a subsidiary of Koch Industries (yes, the Koch brothers!), plans to put Oplink Communications Inc. (Nasdaq: OPLK) under the management of its existing optical asset Molex Inc. (Nasdaq: MOLX). In a joint statement from Koch Industries and Oplink, Molex officials lauded the deal, saying it will enable expansion of its own fiber optics products and capability to innovate.
The bid comes after Oplink has faced several months of criticism from investors Engaged Capital and Voce Capital Management, under the group tag Oplink Shareholders for Change (OSC), that the company was not doing enough to make a decision about the future of its Oplink Connected business. That unit, considered a non-core asset, was recently classified by Oplink as discontinued operations. OSC also had been seeking to place its own representatives on Oplink's board of directors. Earlier this month, OSC also lambasted Oplink for failing to hold an annual shareholders meeting this year. (See Bit Parts: Investors Hound Oplink and Oplink Answers Activist Investors.)
OSC has not yet reacted to news of the acquisition. At least one law firm, The Rosen Law Firm, has already announced it is investigating Oplink's board of directors "for possible breaches of fiduciary duty and other violations of law by failing to adequately shop Oplink to maximize shareholder value before agreeing to be acquired by Koch Optics."
In its most recent financial quarter, ending September 28, Oplink reported revenues of $57.1 million and a net profit of $0.6 million. That was the company's highest ever quarterly revenues, "driven primarily by demand in the North American datacom markets and the continued wireless network build-out in China," noted CEO Joe Liu in the financial statement.
If the takeover goes through, we can safely assume it would dramatically increase Oplink's chances of being mocked in a skit on The Daily Show...
— Dan O'Shea, Managing Editor, Light Reading