IPG Photonics announces sale of its telecom transmission product lines

IPG Photonics has announced that it has sold its telecom transmission product lines, comprised of optical transceivers and coherent components, to Lumentum (NASDAQ: LITE). The divested activities include the former Menara Networks and a subsidiary in Brazil.

While we have made good progress in developing fundamental technologies in our telecom transmission business, our ability to scale these product lines would require a step-up in investment that we believe would be better spent on our core materials processing and adjacent markets. After an in-depth review, we have determined that participation in the broader telecom market is non-core to IPG’s strategy,” said Dr. Eugene Scherbakov, IPG Photonics’ Chief Executive Officer.

Our strategy is to remain focused on revenue diversification and growth opportunities in markets where we can increase our value proposition to customers by delivering advanced laser processing and technology solutions. We are exploring substantial new markets and applications where fiber lasers are replacing existing laser and non-laser technologies by improving efficiency, productivity, or enabling technological breakthroughs for our customers. We would like to thank our telecom transmission employees for their contributions and wish them success with Lumentum, a market leader in optical communications,” Scherbakov added.

The sale will have an immaterial effect on the Company’s total revenue and earnings per share, but is expected to reduce R&D spending and operating expenses going forward. The reduction will help to offset some inflationary pressures, including merit increases, impacting the rest of the year.

Details of the transaction were not disclosed. Centerview Partners served as financial advisor and Locke Lord LLP served as legal counsel to IPG Photonics in the transaction.