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 (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.
Optoelectronics Report (ISSN 1522-2837) encourages the submission of news, views, and comments about your company and the industry. Sales reports, market outlooks, strategic moves, and personnel changes are just a few of the kinds of items we would like you to share with our readers. Please fax information to Gail Overton at (603) 891-0574 or send e-mail to [email protected].
Optoelectronics Report © 2009 is published 24 times a year by PennWell Corp., Advanced Technology Division, Communications and Optoelectronics Group, 98 Spit Brook Road, Nashua, NH 03062, for executives and marketers, highlighting business news and technology trends in the optoelectronics industry. An annual e-mail subscription to Optoelectronics Report, prepaid, is $315 worldwide. The annual Economic Review and Forecast, published in January, is available with the data on disk for $250. All other back issues are $15. All rights reserved. Use of this publication must be in compliance with the law. Optoelectronics Report is protected under international copyright laws and may not be reproduced without special permission of the publisher. Requests for subscription or bulk orders should be sent to Customer Service, 98 Spit Brook Road, Nashua, NH 03062; tel.: (603) 891-9416, FAX: (603) 891-9350.