In what it is calling “an important first step in restructuring our company”, optical components and subsystems vendor Oclaro has sold its Oclaro Switzerland GmbH subsidiary and associated laser diodes business to II-VI Inc. in a transaction valued at $115 million (€86 million).
In addition, II-VI has paid a further $5 million for an exclusive option to purchase Oclaro’s optical amplifier and micro-optics business for $88 million in cash.
“We will use the proceeds from the sale to fully repay our bridge financing and to begin restructuring the company for the future.
We intend to further simplify our operating footprint, reduce our cost structure and focus our R&D investment in the optical communications market where we can leverage our core competencies,” said new CEO Greg Dougherty, who took over from the retired Alain Couder in June.
Of the total transaction value of $115 million, Oclaro received $92 million in cash immediately. Oclaro will retain the existing accounts receivable of the business, estimated at approximately $15 million and the remaining $8 million is being held by II-VI subject to closing conditions.
The gallium arsenide semiconductor laser business originated from IBM Zurich and was integrated with the gallium arsenide semiconductor laser assets in Tucson, Arizona, acquired from Newport Spectra‐Physics in 2009. II‐VI will operate the business as II‐VI Laser Enterprise GmbH.
As part of the deal, Oclaro will continue the back-end manufacturing of the 980-nm pump and some high power laser diode products at its Shenzhen, China manufacturing facility and supply them to II-VI under a manufacturing services agreement.
II-VI has bought up a string of optical companies over the last few years. In 2010 it acquired Photop, a vendor of laser sources, optics and wavelength management devices; then in 2011, it purchased optical monitoring developer Aegis Lightwave in 2011, which was subsequently merged into the Photop brand.
This is the second piece of Oclaro to find its way into II-VI hands; the company bought Oclaro’s thin-film filter and interleaver product lines in late 2012.
The option to purchase Oclaro’s optical amplifier and micro-optics business, for which II-VI separately paid $5 million in cash, will expire if not exercised within 30 days.
By Pauline Rigby
Press release: Oclaro Sells Zurich Gallium Arsenide Laser Diode Business to II-VI Incorporated for $115 Million