Avanex Divests Opto Fabs
FREMONT, Calif. & PARIS, March 5, 2007 -- Avanex Corp., a provider of photonic solutions for fiber-optic communications, announced that it will sell 90 percent of its interest in its subsidiary, Avanex France SA, including its indium phosphide (InP) and gallium arsenide (GaAs) semiconductor fabs.
Avanex will divest the company, located in Nozay, France, to Global Research Co., owned by Alexandre Krivine and Avanex France's current manager, Didier Sauvage, for an undisclosed amount. In addition to the semiconductor III-V fabs, the business includes the laser, terrestrial pump, submarine pump and fiber Bragg grating product lines. Avanex said it will maintain a core development group of approximately 20 employees in France focused on transmission products.
“The divestiture of our fabs and certain product lines simplifies our operating structure, significantly reduces our fixed costs and accelerates our path to profitability,” said Jo Major, Avanex chairman, president and CEO. “We expect to realize approximately $12 million to $16 million in annual financial improvements beginning in our fourth quarter of fiscal 2007.”
The transaction is expected to close in the second quarter of calendar 2007, at which time Avanex will pay Global Research approximately $17.3 million for anticipated working capital, including accrued liabilities for past restructuring activities. Avanex will retain a 10 percent interest in the business and will enter into several commercial and transitional services agreements.
“The series of commercial agreements are designed to ensure our customers reliable access to the technology, continuity of supply, and provide transition support,” Major said.
Upon closing of the transaction, Avanex France SA will be renamed. Krivine will be named CEO and Sauvage will be the company’s first vice president.
Krivine said, “We strongly believe in the potential and opportunity of such industrial activity in Europe and more specifically in France. We believe that with the new company’s technology and expertise, it can play an international role in growing markets such as submarine and terrestrial pumps for telecommunications as well as explore new markets.”
Avanex also announced that it has agreed to a private placement of approximately 10.8 million shares of common stock for $20 million with an "accredited institutional investor" to help fund the divestiture.
For more information, visit: www.avanex.com