Applied Optoelectronics ( NASDAQ: AAOI ) said Thursday it will sell its manufacturing facilities in China and certain assets related to its transceiver business to Yuhan Optoelectronic Technology (Shanghai) for $150M, less a holdback amount.
Once the sale closes, AAOI will have a focused portfolio composed of lasers.
AAOI will retain its manufacturing facilities in Taiwan and Sugar Land, Texas.
Majority of proceeds from the sale will be used for increased investments in AAOI's business, particularly in the CATV business and some newer laser-related products.
Prior to the deal closing, AAOI expects to invest an amount equal to 4-10% of the estimated proceeds in exchange for a 10% stake in Yuhan Optoelectronic.
AAOI plans to use the rest of the proceeds for general working capital purposes.
Yuhan Optoelectronic expects to use AAOI's lasers in the production of datacenter transceiver products.
AAOI expects to continue to use the manufacturing facilities in China on a contract basis to make certain CATV products.
"... it is in the best interest of our shareholders for AAOI to exit the transceiver market and focus resources on our CATV business and manufacturing lasers and laser components for the datacenter, CATV, telecom, and FTTH markets," said AAOI CEO Thompson Lin.
AAOI expects the sale to be completed in 2023.
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Applied Optoelectronics to sell facilities in China, transceiver unit assets for $150M