Alphawave IP Negotiates a Multi-Year Framework
with a Leading North American Hyperscaler for a Potential Roadmap
Delivering Over US$300 Million of
Optical Products
LONDON and HOD HASHARON,
Israel, Oct. 13, 2022 /PRNewswire/ -- Alphawave IP Group
plc ("Alphawave" or "Company") (LN: AWE), a global leader in
high-speed connectivity for the world's technology infrastructure
today announced the acquisition of Banias Labs, an Israel-based optical Digital Signal Processing
("DSP") chip developer for data centers for approximately
US$240 million. The acquisition
strengthens Alphawave's roadmap of optical DSP silicon products for
data centers, a core high growth market for Alphawave.
Alongside the acquisition of Banias Labs, Alphawave has
negotiated a non-binding, multi-year purchasing framework with a
leading North American hyperscaler that proposes a multi-year
roadmap for Alphawave to develop and sell a portfolio of optical
products and DSPs, including coherent DSP technology from Banias
Labs, with sales potentially ramping to over US$300 million.
Tony Pialis, President and
Chief Executive Officer of Alphawave said: "Banias Labs
optical DSP technology provides a strong strategic advantage for
Alphawave, strengthening our roadmap of DSP silicon solutions for
data centers. This acquisition enhances our portfolio of electrical
and optical solutions in the most advanced process technologies.
The multi-year purchasing framework includes coherent optical
solutions, and with the Banias acquisition, Alphawave is expanding
its total addressable market by delivering next generation coherent
optical solutions for the most advanced data centers."
John Lofton Holt, Executive
Chairman of Alphawave said: "We are pleased to welcome the
talented Banias Labs team to Alphawave. This acquisition aligns
with the strategic priorities that we articulated at our IPO,
expanding our technology portfolio in high-speed connectivity to
support long-term growth. Coherent optics will enable the next
level of efficiencies in data center communications, addressing the
increasing bandwidth and power efficiency requirements."
About Coherent Optics
Coherent optics is the next evolution of optical solutions, the
cornerstone of the industry's efforts to achieve 800G and 1.6T
Ethernet speeds while maintaining the required reaches inside and
outside of data centers and also significantly reducing power
consumption. Coherent technology is predominantly used today in
long reaches of over 100km connecting data centers and in
telecommunications. Banias Labs' optical DSP technology strengthens
Alphawave's optical products roadmap by targeting a growing
opportunity for coherent optical technology intra-data center, as
shorter reaches adopt this technology.
Furthermore, Alphawave believes the significant engagement from
a leading North American hyperscaler reflects the importance of
this technology for the future of data center
connectivity.
Key Acquisition Highlights
Key highlights are as follows:
- This acquisition brings silicon-proven optical DSP technology,
expanding Alphawave's product portfolio and strengthening its
product roadmap.
- Banias Labs' technology will expand Alphawave's addressable
market and deepen Alphawave's commercial partnership with a leading
North American hyperscaler.
- Alphawave is committed to becoming an industry leader with a
broad portfolio of PAM4 and Coherent DSPs, in the most advanced
technologies, and for all forms of Data Center connectivity.
Background on Banias Labs
Founded in 2020, Banias Labs1 is a leading
provider of coherent optical DSP semiconductor technology.
Based near Tel Aviv, Israel, the
key core technology leaders have worked together for over two
decades and have a long track record of success in the silicon, IP,
and communications segments of semiconductors. Banias Labs
currently has approximately 50 employees the majority of whom are
R&D focused.
Banias Acquisition Closing Details
Alphawave has acquired 100% of the shares of Banias Labs for a
total cash consideration of US$240
million paid upon closing.
The acquisition is funded out of existing cash and additional
financing. Alphawave has obtained US$210
million of Senior Secured Credit Facilities, comprising a
five-year US$110 million Revolving
Credit Facility and a five-year US$100
million Term Loan. The Company's Pro Forma net debt position
after close is expected to be approximately US$35 million. Alphawave expects to continue to
have a strong cash flow generation profile which combined with the
additional facilities provides a solid platform to navigate this
period of accelerated business expansion.
Outlook
The Company expects the ramp of new Optical products to start in
2024 and profitability to improve from 2023 levels as products go
into high-volume production and generate additional revenue.
Alphawave anticipates additional revenue synergies given the
complementary nature of the technology and its contribution to the
product roadmap. Alphawave reiterates its stand-alone
outlook. Further details on the pro forma 2023 outlook and the
long-term financial model will be communicated at the upcoming
capital markets day on 13 January
2023.
Trading for Q3 2022 has been strong and the Company will publish
its trading update for Q3 2022 next week, on 17 October 2022.
______________________________
|
1 Banias
Labs is the commercial name of Solanium Labs, the name under which
the entity is registered in Israel.
|
Non-Binding Purchasing Framework Details
The non-binding purchasing framework agreement defines a
potential portfolio of optical DSPs, including coherent solutions
based on Banias technology, that Alphawave intends to develop over
the next several years. The Company anticipates ramping up
sales to the leading hyperscaler over a multi-year period, with the
potential for aggregate sales to exceed US$300 million, subject to the Company qualifying
the products for use in the hyperscaler's data centers on a timely
basis and ensuring sufficient silicon availability to meet its
usage demands. The portfolio of optical DSPs continues to build on
the leading connectivity technology that Alphawave has been
delivering to the industry as silicon IPs. In addition, the
non-binding framework agreement contemplates the Company issuing
future stock warrants of up to 2.5% of the issued share capital of
the Company, with vesting based on purchases of Alphawave silicon
products of up to US$700 million over
the same period, and an exercise price based on the current trading
price of the Company's shares, subject to downward adjustment if
the Company's shares trade lower prior to issuance. The Company
intends to solicit all required shareholder approvals, ahead of
finalizing any warrant grants, which are not expected until at
least 2024.
Presentation and webcast
A presentation for investors and analysts will be held today,
13 October 2022, at 8.30am BST. The webcast will be accessible
via:
https://awaveip.zoom.us/s/89082807240?pwd=ODdkSGxlNzZwb3JhR2w2a0pUQWxIUT09
Passcode: 747970
Or by phone:
US: +1 669 900 9128 / +1 719 359 4580 / +1 253 215
8782
United Kingdom: +44 203 901 7895 /
+44 208 080 6591 / +44 330 088 5830
Webinar ID: 890 8280 7240
Full list of dial-in numbers available
https://awaveip.zoom.us/u/kegS2efSIo
A recording of the webcast and the presentation will be
available later today on our website at Results, Reports &
Presentations (awaveip.com)
Trademarks
All registered trademarks and other trademarks belong to their
respective owners.
Contact Information:
Alphawave IP Group
plc
|
John Lofton Holt, Executive
Chairman
Jose Cano, Global Head
of IR
|
ir@awaveip.com
+44 (0) 20 7717
5877
|
Brunswick
Group
|
Simone Selzer
Sarah West
|
alphawave@brunswickgroup.com
+44 (0) 20 7404
5959
|
Gravitate
PR
|
Lisette Paras
Wynton Yu
|
alphawave@gravitatepr.com
+1 415 420
8420
|
About Alphawave IP Group plc (LSE:AWE)
Faced with the exponential growth of data, Alphawave IP's
technology services a critical need: enabling data to travel
faster, more reliably and with higher performance at lower power.
Alphawave IP is a global leader in high-speed connectivity for the
world's technology infrastructure. Our IP and custom silicon
solutions therefore meet the needs of global tier-one customers in
data centers, compute, networking, AI, 5G, autonomous vehicles, and
storage. Founded in Toronto,
Canada in 2017, by an expert technical team with a proven
track record in licensing semiconductor IP, our mission is to focus
on the hardest-to-solve connectivity challenges. To find out more
about Alphawave IP, visit: awaveip.com
This announcement is issued by Alphawave IP Group plc (the
"Company") and contains information which is deemed by the Company
to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No.596/2014 as amended by The Market Abuse
(Amendment) (EU Exit) Regulations 2019. By the publication of this
Announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain. The
person responsible for arranging for the release of this
Announcement on behalf of the Company is Link Company Matters
Limited, acting as Company Secretary.
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