Alphawave IP Acquires Optical DSP Chip Developer Banias Labs, Advancing its Optical DSP Products for Data Centers

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 world chief in high-speed connectivity for the world’s know-how infrastructure right now introduced the acquisition of Banias Labs, an Israel-based optical Digital Signal Processing (“DSP”) chip developer for knowledge facilities for roughly US$240 million. The acquisition strengthens Alphawave’s roadmap of optical DSP silicon merchandise for knowledge facilities, a core excessive progress market for Alphawave.  

Alongside the acquisition of Banias Labs, Alphawave has negotiated a non-binding, multi-year buying framework with a number one North American hyperscaler that proposes a multi-year roadmap for Alphawave to develop and promote a portfolio of optical merchandise and DSPs, together with coherent DSP know-how from Banias Labs, with gross sales doubtlessly ramping to over US$300 million. 

Tony Pialis, President and Chief Executive Officer of Alphawave stated: “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 stated: “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 following evolution of optical options, the cornerstone of the business’s efforts to attain 800G and 1.6T Ethernet speeds whereas sustaining the required reaches inside and out of doors of knowledge facilities and likewise considerably lowering energy consumption. Coherent know-how is predominantly used right now in lengthy reaches of over 100km connecting knowledge facilities and in telecommunications. Banias Labs’ optical DSP know-how strengthens Alphawave’s optical merchandise roadmap by concentrating on a rising alternative for coherent optical know-how intra-data middle, as shorter reaches undertake this know-how.

Furthermore, Alphawave believes the numerous engagement from a number one North American hyperscaler displays the significance of this know-how for the way forward for knowledge middle connectivity. 

Key Acquisition Highlights

Key highlights are as follows:

• This acquisition brings silicon-proven optical DSP know-how, increasing Alphawave’s product portfolio and strengthening its product roadmap.
• Banias Labs’ know-how will develop Alphawave’s addressable market and deepen Alphawave’s business partnership with a number one North American hyperscaler.
• Alphawave is dedicated to changing into an business chief with a broad portfolio of PAM4 and Coherent DSPs, in essentially the most superior applied sciences, and for all types of Data Center connectivity.

Background on Banias Labs

Founded in 2020, Banias Labs¹ is a number one supplier of coherent optical DSP semiconductor know-how.  Based close to Tel Aviv, Israel, the important thing core know-how leaders have labored collectively for over twenty years and have an extended monitor document of success within the silicon, IP, and communications segments of semiconductors. Banias Labs presently has roughly 50 staff the vast majority of whom are R&D targeted.

Banias Acquisition Closing Details

Alphawave has acquired 100% of the shares of Banias Labs for a complete money consideration of US$240 million paid upon closing.

The acquisition is funded out of present money and extra 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 web debt place after shut is anticipated to be roughly US$35 million. Alphawave expects to proceed to have a powerful money circulation era profile which mixed with the extra services offers a stable platform to navigate this era of accelerated business enlargement.

Outlook

The Company expects the ramp of latest Optical merchandise to begin in 2024 and profitability to enhance from 2023 ranges as merchandise go into high-volume manufacturing and generate extra income. Alphawave anticipates extra income synergies given the complementary nature of the know-how and its contribution to the product roadmap.  Alphawave reiterates its stand-alone outlook. Further particulars on the professional forma 2023 outlook and the long-term monetary mannequin will likely be communicated on the upcoming capital markets day on 13 January 2023.

Trading for Q3 2022 has been sturdy and the Company will publish its buying and selling replace for Q3 2022 subsequent week, on 17 October 2022.

Non-Binding Purchasing Framework Details

The non-binding buying framework settlement defines a possible portfolio of optical DSPs, together with coherent options primarily based on Banias know-how, that Alphawave intends to develop over the following a number of years.  The Company anticipates ramping up gross sales to the main hyperscaler over a multi-year interval, with the potential for mixture gross sales to exceed US$300 million, topic to the Company qualifying the merchandise for use within the hyperscaler’s knowledge facilities on a well timed foundation and guaranteeing adequate silicon availability to satisfy its utilization calls for. The portfolio of optical DSPs continues to construct on the main connectivity know-how that Alphawave has been delivering to the business as silicon IPs.  In addition, the non-binding framework settlement contemplates the Company issuing future inventory warrants of as much as 2.5% of the issued share capital of the Company, with vesting primarily based on purchases of Alphawave silicon merchandise of as much as US$700 million over the identical interval, and an train worth primarily based on the present buying and selling worth of the Company’s shares, topic to downward adjustment if the Company’s shares commerce decrease previous to issuance. The Company intends to solicit all required shareholder approvals, forward of finalizing any warrant grants, which aren’t anticipated till no less than 2024.

Presentation and webcast

A presentation for buyers and analysts will likely be held right now, 13 October 2022, at 8.30am BST. The webcast will likely be accessible by way of:

https://awaveip.zoom.us/s/89082807240?pwd=ODdkSGxlNzZwb3JhR2w2a0pUQWxIUT09

Passcode: 747970

Or by telephone:

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 listing of dial-in numbers obtainable  https://awaveip.zoom.us/u/kegS2efSIo

A recording of the webcast and the presentation will likely be obtainable later right now on our web site at Results, Reports & Presentations (awaveip.com)

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About Alphawave IP Group plc (LSE:AWE)

Faced with the exponential progress of knowledge, Alphawave IP’s know-how providers a crucial want: enabling knowledge to journey sooner, extra reliably and with larger efficiency at decrease energy. Alphawave IP is a world chief in high-speed connectivity for the world’s know-how infrastructure. Our IP and customized silicon options subsequently meet the wants of worldwide tier-one prospects in knowledge facilities, compute, networking, AI, 5G, autonomous autos, and storage. Founded in Toronto, Canada in 2017, by an skilled technical group with a confirmed monitor document in licensing semiconductor IP, our mission is to concentrate on the hardest-to-solve connectivity challenges. To discover out extra about Alphawave IP, go to: awaveip.com

This announcement is issued by Alphawave IP Group plc (the “Company”) and comprises info which is deemed by the Company to represent inside info as stipulated below 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 by way of a Regulatory Information Service, this inside info is now thought of to be within the public area. The individual accountable for arranging for the discharge of this Announcement on behalf of the Company is Link Company Matters Limited, performing as Company Secretary.

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