Lasers & Sources

Citing growth opportunities Oclaro and Opnext will merge

March 27, 2012

San Jose, CA--Oclaro and Opnext have entered into a definitive agreement to merge in an all-stock transaction. Opnext shareholders will receive a fixed ratio of 0.42 shares of Oclaro common stock for every share of Opnext common stock they own.

Conard Holton

San Jose, CA--Oclaro (Nasdaq: OCLR) and Opnext (Nasdaq: OPXT) have entered into a definitive agreement to merge in an all-stock transaction. Opnext shareholders will receive a fixed ratio of 0.42 shares of Oclaro common stock for every share of Opnext common stock they own.

The companies said that the combine company would have a broad product portfolio in telecom and datacom, technology innovation, engineering resources, good cost structure, and strategic customer relationships for growth and long-term shareholder value. In addition, the new company will continue targeting a range of high-growth industrial and consumer markets.

The combined company plans to be the largest supplier of laser diodes for industrial and consumer applications. It will be led by Alain Couder, who will serve as chairman and CEO. Upon closing, Harry Bosco will join the combined company's board of directors.

The new company is expected to achieve annualized cost synergies of $35 million to $45 million within 18 months of the close of the transaction, with restructuring and system integration costs to total $20 million to $30 million. The transaction is subject to approval by the shareholders of both companies and the receipt of regulatory approvals in the U.S.

Oclaro and Venture Corp. (SGX: VENM.SI) had recently announced an agreement to transfer Oclaro's Shenzhen, China, final assembly and test operations to Venture's Malaysia facility in a phased transfer of products over the next three years. Over the transition period, this outsourcing activity is expected to free up in excess of $35 million net of transition and employee retention costs. The two companies have also signed a five-year supply agreement.

About the Author

Conard Holton | Editor at Large

Conard Holton has 25 years of science and technology editing and writing experience. He was formerly a staff member and consultant for government agencies such as the New York State Energy Research and Development Authority and the International Atomic Energy Agency, and engineering companies such as Bechtel. He joined Laser Focus World in 1997 as senior editor, becoming editor in chief of WDM Solutions, which he founded in 1999. In 2003 he joined Vision Systems Design as editor in chief, while continuing as contributing editor at Laser Focus World. Conard became editor in chief of Laser Focus World in August 2011, a role in which he served through August 2018. He then served as Editor at Large for Laser Focus World and Co-Chair of the Lasers & Photonics Marketplace Seminar from August 2018 through January 2022. He received his B.A. from the University of Pennsylvania, with additional studies at the Colorado School of Mines and Medill School of Journalism at Northwestern University.