Oclaro Selling Film Business to II-VI
Optoelectronic components maker Oclaro Inc. plans to sell its Santa Rosa-based thin-film filter business to II-VI Inc. subsidiary Photop Technologies, the company announced today. Under the $27 million cash deal, Oclaro also will sell its interleaver product line to Photop Koncent Inc., another II-VI subsidiary.
The divestiture comes three weeks after Oclaro announced "disappointing" financial results for the first quarter of fiscal 2013, which ended Sept. 29. It was the first quarterly earnings since Oclaro acquired Opnext (See: Oclaro Buying Opnext) in an all-stock transaction in July.
Oclaro posted a loss of $31 million for the first quarter of fiscal 2013, excluding a gain on bargain purchase of $39.5 million related to its Opnext acquisition. For the fourth quarter of 2012, the company posted a loss of $10.5 million, which excluded an $11.7 million gain on the sale of some assets and $3.4 million it received from its insurance holder related to write-offs and expenses from the flooding in Thailand last year.
"Divesting our thin-film filter business and the interleaver product line is consistent with our strategy to focus our resources on our core competencies," said Oclaro CEO Alain Couder today, adding that the deals "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."
Based in Saxonburg, Pa., II-VI is a manufacturer of engineered materials and optoelectronic components for markets including industrial manufacturing, military and aerospace, optical communications, electronics and thermoelectronics. It produces numerous crystalline compounds, including zinc selenide for infrared laser optics, silicon carbide for high-power electronic and microwave applications, and bismuth telluride for thermoelectric coolers.
II-VI announced the deal to acquire Photop in late 2009 (See: II-VI to Acquire Photop) for about $83 million in cash and stock. Both Photop and Photop Koncent are located in Fuzhou, China.
II-VI President and CEO Francis J. Kramer said the deal "will enhance Photop's core business while expanding their global footprint and diversification into the growing life sciences market."
Of the $27 million purchase price, $23 million is expected to be paid upon closing, another $3 million to be paid by Dec. 28 and the remaining $1 million held in escrow until Dec. 31, 2013.
Oclaro said divesting the product lines is expected to reduce revenue for the quarter ended Dec. 29 by approximately $2 million compared with the guidance range it gave with its earnings announcement on Nov. 5. Revenue for the product lines for the quarter that ended Sept. 29 was $3.6 million, the company said.
Both transactions are expected to close Dec. 3.
For more information, visit: www.oclaro.com
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