March 3, 2006, San Jose, CA--Bookham, a leading provider of optical components, modules and subsystems, announced that it has signed an agreement to acquire Avalon Photonics (Zurich, Switzerland), a supplier of singlemode and multimode Vertical Cavity Surface Emitting Laser (VCSEL) chips, arrays and subassemblies for sensing and datacom applications.
As consideration, Bookham will exchange approximately 765,000 shares of Bookham common stock valued at approximately $5.5 million on signing, and a potential additional 348,000 share earn-out based upon Avalon achieving certain revenue and production performance criteria over a two-year period. The transaction, which is expected to close in March subject to customary closing conditions, should not have a material effect on Bookham's results for the quarter ending March 31, 2006.
"The acquisition of Avalon strengthens Bookham's product portfolio by adding a new chip technology--VCSELs--to our already broad chip design. This technology will extend our product offerings in the datacom and sensing markets, areas we believe offer good growth opportunities," said Giorgio Anania, president and CEO of Bookham. "Over the next several months we will transfer Avalon's manufacturing to the current Bookham facility, which should result in an improved utilization rate for this facility. In addition, we expect to leverage the newly combined manufacturing and technical strengths of both companies as we continue to expand our product base for the datacom and sensing markets."