Marconi Plc sets off worldwide financial fireworks
Marconi Plc (London, England) lit financial fireworks in markets around the world with its July 4 announcement of a 50% reduction in projected operating profits from the previous year for the fiscal year ending March 31, 2002, on 15% lower revenues. After making the announcement, Marconi suspended its shares while the board drafted a trading statement. Marconi also completed its transition on July 4 from the old British General Electric to a dedicated telecommunications company with the sale of its medical-systems business to Phillips Electronics (Eindhoven, The Netherlands) for $1.1 billion. Marconi also announced 4,000 layoffs (1/4 from management), in addition to the 4,000 announced earlier this year, and CEO-designate John Mayo resigned. In the trading day following the announcement, Marconi lost about half of its market value—almost $5 million.
Luminous Networks gains $80 million in financing
Luminous Networks (Cupertino, CA) completed an $80 million equity-financing round, an investment that signals support for its carrier-class optical-ethernet platform. Total equity investment in Luminous now exceeds $148 million. The financing provides Luminous with working capital for manufacturing its PacketWave products, which are available to US and international carriers. In addition, Luminous will use proceeds to expand its sales and customer service resources, and to further accelerate product development.
Vitesse acquires Versatile, integrating optical and electrical components
Vitesse Semiconductor Corp. (Camarillo, CA) has agreed to acquire Versatile Optical Networks Inc. (San Jose, CA), a manufacturer of optical and optoelectronic modules for integrated telecom system and subsystem networks. Combined with Vitesse's strengths in analog and physical-layer integrated circuits and its emerging indium phosphide manufacturing capability, the two partners enhance their position to supply communications components for integrating optical and optical-to-electrical- to-optical solutions. In connection with the acquisition, Vitesse will issue approximately ten million shares of its common stock in exchange for all of the outstanding equity interests of Versatile.
Zolo Technologies completes $32.5-million financing round
Zolo Technologies Inc. (Louisville, CO), a developer and manufacturer of optical networking subsystems, announced that it raised $32.5 million in Series B financing. Zolo will use these funds to significantly expand its production capacity, product development, and marketing programs for the company's Zmux line of dense wavelength-division-multiplexing (DWDM) products. It promises to provide high-performance DWDM devices at a lower cost per channel using proprietary, grating-based technology.
Shipley enters partnership with Coviant
The Shipley Co. (Marlborough, MA) has invested in Coviant Inc. (Philadelphia, PA) to further its position in the optoelectronics market. Shipley has a growing portfolio of materials and processes used to manufacture semiconductor lasers, optically enabled circuit boards, and optical components for communication networks. Coviant offers outsourced manufacturing solutions for the most difficult steps in fiber attachment, fiber subassembly, micro-assembly, and full-package assembly for optical components. Financial details were not disclosed.
Also in the news . . .
To improve its cash flow, French telecommunications-equipment maker Alcatel (Paris, France) agreed to sell its Richardson manufacturing plant to Sanmina (San Jose, CA), an electronic-components manufacturer that Alcatel has worked with for more than 15 years. . . . Redfern Photonics (Sydney, Australia) received more than $54 million Australian (US $28 million) in its second major external-investment funding. . . . Telecommunications giant Nortel Networks (Ottawa, Canada) reported a deep first-quarter loss due to a downturn in carrier spending, announcing plans to cut 20,000 jobs in low-growth business areas. . . . Startup company Optium (Orlando, FL), which has developed a proprietary optical-device and packaging technology, garnered $35.5 million of equity in its second round of financing.
John Grady