Date: 10/09/2001

Maxim acquires Phyworks to improve its optical tranciever product line

Maxim has acquired Phyworks, a supplier of optical transceiver chips for broadband communications market, for approximately $72.5 million in cash.

The key highlights of this acquisition as stated by Maxim are:
--This acquisition will improve Maxim’s optical transceiver product line.
--Phyworks’ products for fiber-to-the-home (FTTH) applications complement Maxim’s datacom and telecom portfolio.
--Maxim and Phyworks combined will have market share leadership for transceiver chips for optical modules.
--Phyworks’ know-how opens up additional high-speed signal integrity product opportunities for Maxim.
--Served market for optical transceivers and high-speed signal integrity products is estimated to be $340 million in 2014
--This growth is driven by huge demand for data rich applications (high-definition video distribution and cloud computing).
--The acquisition is immediately accretive.
(i) Phyworks’ gross margin is better than the Maxim average.
(ii) With synergies, the acquired operating margin is better than Maxim’s excluding acquisition- related charges and amortization.

Maxim CEO Tunc Doluca remarked: “Business and consumer appetite for access to information anywhere, anytime, will continue to grow exponentially. The backbone to support the increased data traffic is high-speed optical networks. Additionally, optical networks are now beginning to reach consumers directly with fiber to the home. The addition of Phyworks’ product portfolio and talent to Maxim strengthens our market position to capitalize on this growth.”

"Phyworks is very pleased to be joining Maxim," said Stephen King, President and CEO of Phyworks." As the optical communications markets continues to evolve, technologies from both companies can be combined to create higher performance, lower cost solutions that will enable end users to build next generation optical networks. Maxim is the ideal partner for our customers and for our employees, and this combination strengthens Maxim's position as a leader in the markets we share."

"RBC Capital Markets Corporation acted as financial advisor to Phyworks in connection with the transaction."