Oclaro of San Jose,CA,USA,which makes lasers and optical components,modules and subsystems for the optical communications,industrial and consumer laser markets,has agreed to sell the assets of its Santa Rosa thin-film filter business to Photop Technologies Inc of FuZhou,China,a subsidiary of II-VI Inc of Saxonburg,PA,USA(which manufactures crystalline compounds including zinc selenide for infrared laser optics,silicon carbide for high-power electronic and microwave applications,and bismuth telluride for thermoelectric coolers).Oclaro will also sell its interleaver product line to II-VI subsidiary Photop Koncent Inc(FuZhou).Both transactions are expected to close 3 December.
The thin-film filter business and interleaver product line will both report within II-VI's Photop Technologies Inc business unit(and hence included in the firm's Near-Infrared Optics operating segment for financial reporting purposes).Established in 2003 and acquired by II-VI in December 2009,Photop manufactures crystal materials,optics,microchip lasers and opto-electronic modules for use in optical communication networks and other diverse consumer and commercial applications.
Total consideration to Oclaro for these transactions will be in the form of cash proceeds of$27m($23m to be paid upon closing,$3m payable on or before 28 December,and$1m to be held in escrow until 31 December 2013).
"Divesting our thin film filter business and the interleaver product line is consistent with our strategy to focus our resources on our core competencies,"says Oclaro's chairman&CEO Alain Couder."The proceeds from these deals improve our balance sheet and give us additional operating flexibility to serve our global customer base,"he adds."The agreements also strengthen our existing relationships with II-VI and Photop,and will ensure customers in the telecom,life-sciences and industrial markets continued access to these products as part of an even broader portfolio."
"This acquisition will enhance Photop's core business while expanding their global footprint and diversification into the growing life-sciences market,"comments II-VI's president&CEO Francis J.Kramer.
Divesting the product lines is expected to reduce Oclaro's revenue for its fiscal second-quarter 2013(ending 29 December 2012)by about$2m compared to the guidance range issued on 5 November.Revenues for these product lines in the full fiscal first-quarter 2013 were$3.6m.
For both the December quarter and its fiscal year ending 30 June 2013,II-VI does not expect the acquisition to have a material impact on its previously issued guidance for revenue and earnings per share.