PR98257

LONDON and HOD HASHARON, Israel, Oct. 13, 2022 /PRNewswire-AsiaNet/ --

-- 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

Alphawave IP Group plc ("Alphawave" or "Company") (LN: AWE), a global leader in

high-speed connectivity for the world's technology infrastructure today

announced the acquisition of Banias Labs, an Israel-based optical Digital

Signal Processing ("DSP") chip developer for data centers for approximately

US$240 million. The acquisition strengthens Alphawave's roadmap of optical DSP

silicon products for data centers, a core high growth market for Alphawave.  

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Alongside the acquisition of Banias Labs, Alphawave has negotiated a

non-binding, multi-year purchasing framework with a leading North American

hyperscaler that proposes a multi-year roadmap for Alphawave to develop and

sell a portfolio of optical products and DSPs, including coherent DSP

technology from Banias Labs, with sales potentially ramping to over US$300

million.

Tony Pialis, President and Chief Executive Officer of Alphawave said: "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 said: "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 next evolution of optical solutions, the cornerstone of

the industry's efforts to achieve 800G and 1.6T Ethernet speeds while

maintaining the required reaches inside and outside of data centers and also

significantly reducing power consumption. Coherent technology is predominantly

used today in long reaches of over 100km connecting data centers and in

telecommunications. Banias Labs' optical DSP technology strengthens Alphawave's

optical products roadmap by targeting a growing opportunity for coherent

optical technology intra-data center, as shorter reaches adopt this technology.

Furthermore, Alphawave believes the significant engagement from a leading North

American hyperscaler reflects the importance of this technology for the future

of data center connectivity.

Key Acquisition Highlights

Key highlights are as follows:

    -- This acquisition brings silicon-proven optical DSP technology,

       expanding Alphawave's product portfolio and strengthening its product

       roadmap.

    -- Banias Labs' technology will expand Alphawave's addressable market and

       deepen Alphawave's commercial partnership with a leading North

       American hyperscaler.

    -- Alphawave is committed to becoming an industry leader with a broad

       portfolio of PAM4 and Coherent DSPs, in the most advanced

       technologies, and for all forms of Data Center connectivity.

Background on Banias Labs

Founded in 2020, Banias Labs(1) is a leading provider of coherent optical DSP

semiconductor technology.  Based near Tel Aviv, Israel, the key core technology

leaders have worked together for over two decades and have a long track record

of success in the silicon, IP, and communications segments of semiconductors.

Banias Labs currently has approximately 50 employees the majority of whom are

R&D focused.

Banias Acquisition Closing Details

Alphawave has acquired 100% of the shares of Banias Labs for a total cash

consideration of US$240 million paid upon closing.

The acquisition is funded out of existing cash and additional 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 net debt position after close

is expected to be approximately US$35 million. Alphawave expects to continue to

have a strong cash flow generation profile which combined with the additional

facilities provides a solid platform to navigate this period of accelerated

business expansion.

Outlook

The Company expects the ramp of new Optical products to start in 2024 and

profitability to improve from 2023 levels as products go into high-volume

production and generate additional revenue. Alphawave anticipates additional

revenue synergies given the complementary nature of the technology and its

contribution to the product roadmap.  Alphawave reiterates its stand-alone

outlook. Further details on the pro forma 2023 outlook and the long-term

financial model will be communicated at the upcoming capital markets day on 13

January 2023.

Trading for Q3 2022 has been strong and the Company will publish its trading

update for Q3 2022 next week, on 17 October 2022.

(1) Banias Labs is the commercial name of Solanium Labs, the name under which

the entity is registered in Israel.

Non-Binding Purchasing Framework Details

The non-binding purchasing framework agreement defines a potential portfolio of

optical DSPs, including coherent solutions based on Banias technology, that

Alphawave intends to develop over the next several years.  The Company

anticipates ramping up sales to the leading hyperscaler over a multi-year

period, with the potential for aggregate sales to exceed US$300 million,

subject to the Company qualifying the products for use in the hyperscaler's

data centers on a timely basis and ensuring sufficient silicon availability to

meet its usage demands. The portfolio of optical DSPs continues to build on the

leading connectivity technology that Alphawave has been delivering to the

industry as silicon IPs.  In addition, the non-binding framework agreement

contemplates the Company issuing future stock warrants of up to 2.5% of the

issued share capital of the Company, with vesting based on purchases of

Alphawave silicon products of up to US$700 million over the same period, and an

exercise price based on the current trading price of the Company's shares,

subject to downward adjustment if the Company's shares trade lower prior to

issuance. The Company intends to solicit all required shareholder approvals,

ahead of finalizing any warrant grants, which are not expected until at least

2024.

Presentation and webcast

A presentation for investors and analysts will be held today, 13 October 2022,

at 8.30am BST. The webcast will be accessible via:

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

Passcode: 747970

Or by phone:

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 list of dial-in numbers available  https://awaveip.zoom.us/u/kegS2efSIo

A recording of the webcast and the presentation will be available later today

on our website at Results, Reports & Presentations (awaveip.com) (

https://www.awaveip.com/en/investors/results-reports-presentations )

Trademarks

All registered trademarks and other trademarks belong to their respective

owners.

Contact Information:

Alphawave IP Group plc

John Lofton Holt, Executive Chairman

Jose Cano, Global Head of IR

ir@awaveip.com

+44 (0) 20 7717 5877

Brunswick Group

Simone Selzer

Sarah West

alphawave@brunswickgroup.com

+44 (0) 20 7404 5959

Gravitate PR

Lisette Paras

Wynton Yu

alphawave@gravitatepr.com

+1 415 420 8420

About Alphawave IP Group plc (LSE:AWE)

Faced with the exponential growth of data, Alphawave IP's technology services a

critical need: enabling data to travel faster, more reliably and with higher

performance at lower power. Alphawave IP is a global leader in high-speed

connectivity for the world's technology infrastructure. Our IP and custom

silicon solutions therefore meet the needs of global tier-one customers in data

centers, compute, networking, AI, 5G, autonomous vehicles, and storage. Founded

in Toronto, Canada in 2017, by an expert technical team with a proven track

record in licensing semiconductor IP, our mission is to focus on the

hardest-to-solve connectivity challenges. To find out more about Alphawave IP,

visit: awaveip.com (

https://c212.net/c/link/?t=0&l=en&o=3675188-1&h=2756367379&u=http%3A%2F%2Fwww.awaveip.com%2F&a=awaveip.com

)

This announcement is issued by Alphawave IP Group plc (the "Company") and

contains information which is deemed by the Company to constitute inside

information as stipulated under 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 via a Regulatory Information Service, this

inside information is now considered to be in the public domain. The person

responsible for arranging for the release of this Announcement on behalf of the

Company is Link Company Matters Limited, acting as Company Secretary.

SOURCE Alphawave IP Group Plc