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APRIL 4, 2008 By Stephen Hardy -- EMCORE Corp. (search for EMCORE) plans to split into two companies, with its fiber-optics business providing the focus for one and its photovoltaic operations serving as the foundation of the other. EMCORE's board of directors also elected a new chairman and CEO.
Reuben Richards was elected to the newly created position of executive chairman. He will replace Dr. Thomas Russell, who will remain on the board as chairman emeritus. Dr. Hong Hou, currently the company's president and COO, succeeds Richards as CEO and will continue to report to Richards. The two will be active in different aspects of running the company.
Finally, the company also announced that board member Thomas Werthan has resigned.
EMCORE did not disclose a timetable for splitting the company or provide details about who would manage the resultant entities. "We are excited to be taking the first steps in this process, which we believe allows us to maximize the potential of both our business segments," said Richards. "We will be working closely with investment, accounting, and legal advisors over the coming months to develop a structure for this separation that will maximize operating efficiencies as well as maximizing shareholder value."
The decision to divide the company in two comes shortly after EMCORE acquired Intel's optical telecom components business. In a note to investors, Needham & Company analyst John Harmon said that a standalone fiber-optics business could be expected to generate $235 million in revenues during fiscal 2009. He also noted that the two businesses currently share the same fab in Albuquerque, NM. Harmon said that EMCORE could finish its division by the end of this calendar year with favorable market conditions.
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