Oclaro and Newport swap strategic assets
SAN JOSE AND IRVINE, CA--On the heels of the recent formation of Oclaro through the merger of Bookham and Avanex, Oclaro announced that it has signed a definitive agreement with Newport Corporation in which Newport will acquire the New Focus business of Oclaro’s Advanced Photonics Solutions division in exchange for the Newport Spectra Physics high-power laser diode business.
SAN JOSE AND IRVINE, CA--On the heels of the recent formation of Oclaro through the merger of Bookham and Avanex (see www.laserfocusworld.com/articles/360432), Oclaro announced that it has signed a definitive agreement with Newport Corporation in which Newport will acquire the New Focus business of Oclaro’s Advanced Photonics Solutions division in exchange for the Newport Spectra Physics high-power laser diode business. Oclaro will also receive $3 million in cash proceeds, which is expected to fund the substantial portion of related transition and integration costs.
The transaction will enable Oclaro to expand its high-power laser diode portfolio with a deeper expertise in systems and packaging to target higher-value solutions in new markets. “Oclaro is executing on its strategy to become a predominant force in the fiber optics industry,” said Alain Couder, president and CEO, Oclaro. “The high power laser diode business is ideally aligned with Oclaro’s business model, corporate growth strategy and core competencies. The consolidation of the Tucson fab into Oclaro’s Caswell and Zurich fabs is expected to increase wafer volumes by about 30% and improve the gross margin for Oclaro’s telecom products as well.”
The product line is complementary to Oclaro’s single emitter and bars products and offers new growth opportunity for Oclaro in the medical and analytic, printing, and industrial applications in Japan and North America. The Newport Spectra Physics high-power laser diode business and the Oclaro New Focus business are comparable in size, each with revenues between $20 million and $30 million in the twelve months ended March 31, 2009.
The agreement includes a four-year supply agreement whereby Oclaro will be sole source supplier of diodes to Newport Spectra Physics for a one-year period followed by majority allotment for the next three years. With no customer overlap, Oclaro expects the acquisition to be seamless to both Oclaro and Newport customers. Oclaro will purchase the operating assets of the Spectra Physics Tucson, Arizona facility, as well as the intellectual property of the diodes business, while Newport retains all obligations under the facility lease.
“With Oclaro as our trusted partner, Newport can focus on its own core competencies as a laser systems supplier,” said Dave Allen, VP and general manager, Spectra Physics Laser Division, Newport Corporation.
The transaction is subject to customary closing conditions and is expected to close early in the fiscal quarter ending September 26, 2009.
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