Fiber Optics

Lumentum buys Oclaro for $1.8 billion, expands portfolio of photonics products

March 12, 2018

Goal is to make stronger player in fiber optic components and modules, industrial products, and 3D sensing.

Lumentum Holdings (Milpitas, CA), a maker of optical networking products and lasers for industrial and consumer markets, will acquire Oclaro (San Jose, CA), which makes optical components and modules for the long-haul, metro, and data center markets. Oclaro stockholders will receive approximately $1.8 billion in equity value, based on the closing price of Lumentum's stock on March 9, of $68.98. The transaction value represents a premium of 27% to Oclaro's closing price on March 9, 2018, and Oclaro stockholders will own approximately 16% of the combined company.

"Joining forces with Oclaro strengthens our product portfolio, broadens our revenue mix, and positions us strongly for the future needs of our customers,” said Alan Lowe, Lumentum President and CEO. “Oclaro brings its indium phosphide laser and photonic integrated circuit and coherent component and module capabilities to Lumentum. The combined company will drive innovation faster and accelerate the development of products to enable our customers to win.”

Greg Dougherty, Oclaro's CEO, added, "I am very pleased that two of the optical industry leaders will join forces. Together, we will be an even stronger player in fiber optic components and modules for high-speed communications and a market leader in 3D sensing."

The transaction is expected to generate more than $60 million of annual run-rate synergies within 12 to 24 months of the closing and be immediately accretive to non-GAAP earnings per share. The transaction is expected to close in the second half of calendar 2018, subject to approval by Oclaro's stockholders and antitrust regulatory approval in the US and China.

Source: Lumentum

About the Author

Conard Holton | Editor at Large

Conard Holton has 25 years of science and technology editing and writing experience. He was formerly a staff member and consultant for government agencies such as the New York State Energy Research and Development Authority and the International Atomic Energy Agency, and engineering companies such as Bechtel. He joined Laser Focus World in 1997 as senior editor, becoming editor in chief of WDM Solutions, which he founded in 1999. In 2003 he joined Vision Systems Design as editor in chief, while continuing as contributing editor at Laser Focus World. Conard became editor in chief of Laser Focus World in August 2011, a role in which he served through August 2018. He then served as Editor at Large for Laser Focus World and Co-Chair of the Lasers & Photonics Marketplace Seminar from August 2018 through January 2022. He received his B.A. from the University of Pennsylvania, with additional studies at the Colorado School of Mines and Medill School of Journalism at Northwestern University.