Russia’s sovereign technology investment corporation pays $8 per share for stake in photonic chip developer.
California-based photonic integrated circuit (PIC) module and subsystem developer NeoPhotonics is set to establish R&D, design and production facilities in Russia, following a major new investment from the country’s sovereign technology fund Rusnano. The fund, which has previously invested in a number of other photonics companies, including IPG Photonics via its subsidiary IRE-Polus, paid close to $40 million for just under five million newly issued shares in NeoPhotonics – equivalent to around a 17% stake. The premium is significant: at $8 per share, Rusnano paid close to double the market price of the San Jose company’s stock, and the vote of confidence sent NeoPhotonics’ share price up by nearly 10% in early trading on April 30, to approximately $5.
Rusnano’s managing director Sergey Polikarpov, who joins the NeoPhotonics board of directors following the investment, said in a statement: “[NeoPhotonics’] planned research and production facilities in Russia are intended to be able to perform a wide range of steps from PIC development to processing and fabrication. We believe that with our support in Russia, we can further enhance the company’s development cycles and shorten the time for broader adoption for NeoPhotonics products in Russia and the global market.”
That relates to the proliferation of fiber-optic communications around the world, from fiber-to-the-home deployments in China to the needs of emerging economies in the former Soviet bloc. Tim Jenks, NeoPhotonics’ CEO, commented: “We welcomed this investment as it aligns with our strategy to accelerate growth globally, with particular emphasis on fast-growing and emerging markets, including in Russia and the CIS [Commonwealth of Independent States] countries.” “Not only are these markets deploying high-speed, agile and fiber-to-the-home networks but we are also seeing more of our customers target service providers and invest locally in Russia and more broadly in eastern Europe,” Jenks added.
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