Monday, October 30, 2023

Lumentum to acquire Cloud Light for 800G+ modules and AOCs

Lumentum agreed to acquire Cloud Light, a supplier of fiber optic transceivers and active optical cables for intra-datacenter optical interconnect, in a transaction valued of approximately $750 million.

Lumentum said the acquisition will accelerated its push into the fastest growing segments of the multibillion-dollar opportunity for optical modules used in cloud computing data center infrastructure. 

Cloud Light, which is based in Hong Kong, said nearly all of its $200M revenue in the last 12 months was derived from 400G or higher speed transceiver sales. In the most recent quarter, over half of Cloud Light’s optical transceiver revenue was derived from 800G modules.

“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. This results in a broad product and technology portfolio that addresses a wide range of cloud operator needs.”

“We are confident that this transaction will deliver substantial, long-term value to our stockholders, with immediate earnings accretion and accelerated revenue growth. We look forward to welcoming Cloud Light’s very talented team to Lumentum,” concluded Mr. Lowe.

“Today’s announcement is a pivotal milestone in the history of Cloud Light, and a testament to the hard work and dedication of our employees,” said Dr. Dennis Tong, Cloud Light Founder and CEO. “We founded the company with a vision that our deep expertise in high-volume precision manufacturing would result in a superior value proposition for cloud data center customers. Having worked closely with the technology teams within leading cloud operators, we believe we can build upon our success to date and further accelerate cloud data center growth by combining Lumentum’s advanced photonic integration and transmission technologies with our highly automated packaging and manufacturing processes. We look forward to joining the Lumentum team and beginning an exciting new chapter.”

Jabil to take over Intel's Silicon Photonics transceiver business

Jabil will take over the manufacture and sale of Intel’s current Silicon Photonics-based pluggable optical transceiver product lines and the development of future generations of such modules.

"This deal better positions Jabil to cater to the needs of our valued customers in the data center industry, including hyperscale, next-wave clouds, and AI cloud data centers. These complex environments present unique challenges, and we are committed to tackling them head-on and delivering innovative solutions to support the evolving demands of the data center ecosystem," stated Matt Crowley, Senior Vice President of Cloud and Enterprise Infrastructure at Jabil. "This deal enables Jabil to expand its presence in the data center value chain."

Through its photonics business unit, Jabil empowers organizations to reduce the complexities of developing and deploying enhanced optical networking solutions by offering complete photonics capabilities, including component design, system assembly, and streamlined supply chain management.

“We are pleased to reach this agreement with a world-class supplier like Jabil. We look forward to working closely with Jabil, our customers, and our suppliers to enable a seamless transition as Intel shifts its focus to silicon photonics components for existing markets and emerging applications,” said Safroadu Yeboah-Amankwah, Senior Vice President and Chief Strategy Officer of Intel Corporation.

“Our Design-to-Dust™ capabilities continue to resonate with customers and we are investing in the areas of data center infrastructure services, liquid cooling, and silicon photonics to help our customers solve their challenges. Jabil is extremely well positioned to support customers as they incorporate innovative technologies into their data centers to navigate the increasing requirements around power and cooling being driven by artificial intelligence,” concluded Crowley.

STL develops 160-micron fibre

STL announced a 160-micron optical fiber developed in India. This product meets telecom-grade optical performance standards and complies with the ITU G.657A2 standard.

STL said its 160-micron fibre packs more capacity in limited duct space with a reduced diameter cable of 6.4mm (~32% reduction compared to 250-micron fibre). 

The new fibre is expected to have a major impact on India's broadband landscape. For example - In a large-scale project like Bharatnet, where India needs to deploy ~20 Million fibre km cable by 2025, using 160-micron fibre instead of the standard 250-micron fibre can potentially reduce the deployment time by ~15%. This enables the use of ducts with a smaller diameter, thereby reducing the plastic footprint in the ground by ~30%.

Vantage Data Centers completes €2.5 billion financing

Vantage Data Centers completed a previously announced investment partnership in certain Vantage European data center assets backed by a consortium of investors led by MEAG and Infranity, along with funds affiliated with the investment management platform of DigitalBridge.

The Investment Partnership initially consists of six stabilized data centers in strategic locations across Europe and is valued at approximately €2.5 billion (approximately $2.7 billion), including Vantage’s stake. The data centers span more than 1.8 million gross square feet and 177MW of IT capacity and are located in key strategic markets.

Vantage’s management team, led by President and CEO Sureel Choksi, will continue to manage and operate these assets as part of its global data center portfolio. The additional capital raised from the Investor Consortium will be used to support the continued growth of Vantage’s EMEA data center platform.

“This Investment Partnership provides Vantage with multiple partners with deep expertise in digital infrastructure,” said Choksi. “This transaction provides Vantage with additional capital to continue our expansion in new and existing markets across EMEA, capitalizing on the extraordinary growth opportunities, driving innovation and delivering state-of-the-art sustainable data centers for our customers.”

Arista posts Q3 sales of $1.509 billion, up 28% yoy

Arista Networks reported Q3 revenue of $1.509 billion, an increase of 3.5% compared to the second quarter of 2023, and an increase of 28.3% from the third quarter of 2022. Non-GAAP gross margin six 63.1%, compared to non-GAAP gross margin of 61.3% in the second quarter of 2023 and 61.2% in the third quarter of 2022.  Non-GAAP net income amounted $581.4 million, or $1.83 per diluted share, compared to non-GAAP net income of $391.9 million, or $1.25 per diluted share in the third quarter of 2022. 

Some notes:

  • Supply chain and lead time is improving
  • International sales amounted to 21.5%, with the Americas at 78.5%. 
  • Services and subscription software contributed approximately 16.8% of revenues in the third quarter, up from 15.2% in Q2. 

“Arista once again delivered strong financial results in the third quarter,” says Jayshree Ullal, President and CEO of Arista Networks. “Customer momentum remained strong in both enterprise and cloud/AI sectors.”

Commenting on the company's financial results, Ita Brennan, Arista’s CFO said, “The team continues to demonstrate strong discipline, working to normalize supply chain metrics while delivering incremental improvements to our 2023 outlook, which now calls for year-over-year revenue growth in excess of 33%.”

KMR confirms $400M investment in OMS for subsea cables

KKR, a leading global investment firm, agreed to invest $400 million in OMS Group, a leading telecom infrastructure company and provider of subsea cable services.

Founded in 1988, OMS Group is a neutral provider of integrated solutions for subsea telecommunications cable services, including installation and maintenance projects. The company's clients include major subsea equipment providers, large-scale cloud service providers, and telecom companies. OMS Group is one of the largest independent operators in this sector, with a diverse fleet including cable ships and cable barges, as well as cable landing stations serving the global telecommunications market.

KKR said this investment positions OMS Group well to accelerate its growth, including through expanding its fleet size and capabilities and investing in cable landing stations and subsea cable routes to serve global fast-growing cross-border data transmission trends and the demand for comprehensive subsea cable services.

Mr Projesh Banerjea, Director, Infrastructure at KKR, said, “OMS Group has established itself as a market leader with a longstanding track record of success and growth in Southeast Asia. As demand for greater connectivity across the region continues to grow, we are delighted to work closely with Datuk Lim, Mr Ronnie Lim, and the highly rated OMS Group team to meet this critical need.”

Datuk Soon Foo Lim, OMS Group’s Chairman, said, “OMS Group and KKR share the same vision and appreciation of the critical data infrastructure OMS Group builds and maintain for its clients. We look forward to working with Mr David Luboff, Mr Projesh Banerjea and the world-class KKR team in advancing OMS Group’s growth plans.”

Past KKR investments in Southeast Asia digital infrastructure have included the regional data center platform of Singtel, a leading Asian communications technology group headquartered in Singapore, and Pinnacle Towers, a digital infrastructure platform in Asia with a strong focus on the Philippines. Globally, KKR’s investments in digital infrastructure have included CyrusOne, a global leader in the development and operation of sustainable, scalable, high-availability and flexible data center solutions, and Global Technical Realty, a build-to-suit and roll-up acquisition data center platform in Europe.

Windstream appoints Paul H. Sunu as CEO

Windstream named Paul H. Sunu has its new President and CEO, effective immediately, replacing Tony Thomas, who has decided to depart the Company and step down from the Board, following a distinguished 17 years at Windstream. 

Mr. Sunu has served as Chairman of the Board since 2020 and will retain his position. 

Mr. Sunu brings 27 years of telecom industry experience. During his tenure as CEO of FairPoint Communications, he helped improve service quality, develop an 18K-mile fiber network and served over 300 health care facilities and 1,600 fiber-to-the-tower connections, leading to a merger with Consolidated Communications. He was a co-founder of Madison River Communications, where he was instrumental in acquiring and integrating five RLEC operations, resulting in a merger with CenturyLink (now Lumen). He has served on numerous boards, including as Chairman and Vice Chairman of Electric Lightwave, where he helped guide the transformation of the company’s business model into a fiber-centric operation, resulting in a merger with Zayo.

“Over the past three years as Chairman, I have come to appreciate the caliber of the management team and the determination, dedication and talent within Windstream. I look forward to working with them to serve our customers with excellence as we continue to expand our fiber network,” said Mr. Sunu.

During Mr. Thomas’ tenure, Windstream acquired, merged and integrated several companies, successfully restructured under Chapter 11 and launched its fiber transformation. Mr. Thomas also held several leadership positions, including CFO of Windstream.

“I am proud of what we have achieved at Windstream,” said Mr. Thomas. “I thank the Board for their support and remain confident that the Company is on the right course.”

Windstream is owned by Elliott Investment Management, OakTree Capital Management, PIMCO and other principal investors.