Severs Semiconductor spun off its photonics business to create an independent and publicly traded photonics company - Xunshi Optoelectronics Network (iccsz.com)

Abstract: Sivers Semiconductors has entered into a letter of intent with byNordic Acquisition for a business combination of Sivers' photonics subsidiary, Photonics Ltd. The merger is expected to unlock significant value and create an independent NASDAQ-listed photonics company in the United States.

ICC News Earlier this month (August 6), Sivers Semiconductors AB (Stockholm Exchange: SIVE), a leading supplier of integrated chips and photonic modules for state-of-the-art communications and sensor solutions, announced that it has entered into a partnership with byNordic Acquisition Corporation (NASDAQ: BYNO) has signed a non-binding Letter of Intent ("LOI") to present its subsidiary, Sivers Photonics Ltd. merged with byNordic. The proposed transaction will create an independent, publicly listed photovoltaic subsidiary that will be funded by substantial cash reserves upon completion of the shelling process.

Severs currently consists of two fully independent wholly owned subsidiaries for different markets: wireless and photonics. Sivers' photonics subsidiary is one of the world's leading suppliers of semiconductor photonics, with a particular focus on indium phosphide (InP) laser sources, developing customizable lasers targeting high-growth markets for AI infrastructure and sensing applications in the data center, consumer healthcare, and automotive lidar sectors.

Thanks to more than 25 years of research and development, the Sivers Photonics subsidiary has developed a unique technology portfolio and employs 80 people, including 12 PhDs. The company has three issued patents and sixteen patents pending in United States, United Kingdom, Canada and the World Intellectual Property Organization. In addition, Sivers Photonics currently has development contracts for several leading silicon photonics (SiPh) suppliers such as Ayar Labs develops unique, high-performance lasers and is in talks with several leading AI companies, including hyperscalers.

With the divestiture and merger of the photonics subsidiary, Sivers' remaining wireless business will include a range of leading-edge products such as mmWave beamforming front-end integrated circuits, RF transceivers, repeaters, and software algorithms for optimal mmWave RF performance for satellite and 5G infrastructure. In 2023, Sivers' wireless revenue grew 155% to approximately $15 million. These markets are growing at a rapid pace, and Severs has won a series of contracts and design victories Win), which is expected to drive significant product revenue growth over the next 3-5 years.

The Sivers Photonics subsidiary is a leading company in the field of tunable multi-wavelength lasers for direct on-chip integration. According to industry research, GPU sales for generative AI will grow significantly to about 18 million units, which management estimates will result in a total addressable market size of $5 billion for chip-to-chip connectivity and $1 billion in serviceable addressable markets by 2027. The demands of AI applications will require significant increases in processing power and energy consumption. According to Electric Power Research According to the Institute, data centers could consume up to 9% of total electricity generation in the United States by the end of the decade, a figure that more than doubles current consumption. The application of silicon photonics (SiPh) in data centers is the main solution to solve the bottleneck of inter-chip connectivity required for generative AI and significantly reduce energy consumption. Silicon photonics transmits data through light instead of electrons in copper wires, enabling faster data transfer speeds and lower latency, and up to 90% less energy consumption than copper solutions.

In addition, consumer biometric sensors using photonic lasers are enabling innovative wearable healthcare products with applications ranging from tracking personal fitness to monitoring human biometrics and point-of-care solutions. Over the past few years, a single customer has been working with Sivers Photonics has signed more than $18 million in development contracts to improve and optimize lasers for biometric sensors. Although this market is still in the early stages of development, Sivers is a major player in providing sophisticated photonic biosensors to this growing market Photonics' deep R&D expertise has created a unique competitive advantage.

"We believe the potential of AI photonics is enormous, but this potential is overshadowed by the equally exciting Wireless business unit of Sivers. Given the appeal of silicon photonics in AI infrastructure and the growing demand for photonic biometric sensors, we believe it is time to present this business unit as a separate entity to access United States capital markets and create opportunities for our shareholders to participate in its potential future success." Bami, Chairman of Severs Semiconductor Bastani said. "At the same time, we look forward to leveraging the success of Sivers' wireless business unit and the need for our leading-edge mmWave beamforming solutions in the satellite and 5G space to build a fully fabless, less capital-intensive company that continues to be listed under the Severs Semiconductor umbrella."

The transaction is expected to unlock significant value and create a separate United States listed entity, which will bring Sivers Photonics closer to investors, customers, and partners in the United States AI ecosystem. Currently, about 80% of Sivers Photonics' revenue comes from the United States.

Under the terms of the non-binding letter of intent, byNordic and Severs intend to enter into a definitive agreement for the acquisition of Severs Photonics. The completion of the business combination is subject to the completion of due diligence, the negotiation and execution of definitive documents and the satisfaction of the conditions contained therein, including (i) obtaining certain concurrent financing, (ii) completing any necessary stock exchange and regulatory reviews, and (iii) obtaining approval of the transaction by the boards of directors and shareholders of byNordic and Severs Photonics. The terms of the proposed transaction provide that Severs Photonics will be divested and merged with byNordic, and that the equity holders of the original Severs Photonics and byNordic (following the completion of the business combination) will hold shares in the combined public company, and Severs will hold majority ownership of the combined public company. Once the merger is finalized, the company plans to set up its headquarters in Silicon Valley, California, while manufacturing operations remain in the United Kingdom.

Severs management will update this announcement as further clarity becomes available on these issues. In the meantime, given the sensitive nature of the negotiations, Severs management will not provide further comment on what is described in the press release.

Setterwalls and Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to Sivers Semiconductor. Loeb & Loeb LLP served as legal counsel to byNordic Acquisition.

About Bynordic Acquisition Corporation

byNordic Acquisition was incorporated in Delaware on December 27, 2019 as a Special Purpose Acquisition Company (SPAC), also known as a blank check company. These companies typically raise capital in the public markets first and then look for targets with growth potential for mergers and acquisitions. byNordic Acquisition focuses on industries that complement the management team's background and leverages the management team's ability to identify and acquire technology-focused businesses in growth companies in Northern Europe, including the Nordic and Scandinavian countries, the Baltic States, the United Kingdom and Ireland, Germany, and France and the Benelux countries.

Original: https://www.sivers-semiconductors.com/press/sivers-semiconductors-enters-into-letter-of-intent-with-bynordic-acquisition-corporation-for-business-combination-of-sivers-photonics-subsidiary/