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

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

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