Semiconductor company Poet Technologies is acquiring a Singapore firm in a similar sector, in a move to increase its product range and expand across the region.
Poet will pay $18.4 million for DenseLight Semiconductors and an additional $1.35 million tied to first-year revenue performance through a combination of stocks and cash. Some of the funds will be used to repay DenseLight's debts and other liabilities.
DenseLight was founded in 2000 by technopreneurs from Nanyang Technological University's photonics labs.
The firm designs and manufactures photonic products, which are used in communications, healthcare, navigation, and oil and gas exploration and production.
Poet will fully own DenseLight and its global photonics business and assets, including its facilities at Changi Industrial Park, intellectual property and technologies once the acquisition has been completed.
This is expected to be around May 10, subject to regulatory approval.
The firm will continue to expand DenseLight's existing manufacturing facilities here and hopes to benefit from access to its pool of engineers and increased supply chain off-licences as some of its key suppliers are in Asia.
Poet previously announced a collaboration with the Institute of Materials Research and Engineering, part of the Agency for Science, Technology and Research (A*Star), to develop new technologies.
Mr Pee Beng Kong, director of electronics at the Economic Development Board, said in a statement yesterday: "Compound semiconductor is both a cornerstone and potential technology disruptor in the electronics industry... It holds the potential to introduce new creative solutions for the consumer, automotive and industrial markets.
"The combination of Poet... and DenseLight enhances Singapore's position in the growing compound semiconductor industry."
Poet chief executive Suresh Venkatesan added: "Poet now has a larger product portfolio to enhance our mission of enabling integrated photonic products for our expanded end markets."
DenseLight chief executive Jerry Rodrigues said his firm has capabilities in complementary products that will help Poet address "mega data centre demands of now and tomorrow".
"Synergies created by the acquisition will address the rapidly growing adoption of photonics and opto-electronics solutions in communications, data centres, healthcare and the Internet of Things around the world," he added.
Mr Rodrigues founded electronics firm Gul Technologies in 1988.