Optical network company Lumentum is buying Cloud Light Technology for $750 million.
Hong Kong-based Cloud Light Technology makes optical modules for data center interconnects. Nearly all of the company's more than $200M revenue in the last 12 months came from 400G or higher speed transceiver sales, while the last quarter saw half of its revenue in 800G modules.
The acquisition will help Lumentum move into the optical modules market, and boost its ability to ship photonics to cloud operators "fivefold", allowing it to meet demand due to generative AI's need for 400G and high-speed optical transceivers.
“With Cloud Light, we are making a strategic investment to significantly expand our opportunities in the cloud data center and networking infrastructure space,” said Alan Lowe, Lumentum president and CEO. “Cloud Light provides us with the highest speed transceiver solutions at scale and complements our advanced component capabilities."
The acquisition is expected to double Lumentum's cloud data center infrastructure revenue.
BofA Securities served as the exclusive financial advisor to Lumentum and Wilson Sonsini Goodrich & Rosati, and Professional Corporation served as legal advisor. Morgan, Lewis & Bockius LLP served as legal advisor to Cloud Light.
Lumentum is a designer and manufacturer of optical and photonic products for optical networking and laser applications. The company is headquartered in San Jose, California.
Expected to be completed at the end of 2023, the transaction will be paid in cash and the assumption and substitution of outstanding unvested Cloud Light options.