Bookham Buys Avalon Photonics

SAN JOSE, Calif., March 3, 2006 -- Optical component maker Bookham Inc. announced yesterday that it is acquiring Avalon Photonics, a Zurich, Switzerland-based supplier of single-mode and multimode vertical-cavity surface-emitting laser (VCSEL) chips, for approximately $5.5 million in Bookham stock.

Under terms of the deal, Bookham will exchange approximately 765,000 shares of its common stock valued at $5.5 million, with the potential for an additional 348,000 shares to be exchanged if Avalon meets performance goals over the next two years. The transaction, which is expected to close this month, is subject to customary closing conditions. Avalon Photonics' VCSEL chips, arrays and subassemblies are used in the data communications, sensing and measurement markets.

“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,” said Giorgio Anania, Bookham president and CEO, in a prepared statement.

Bookham makes optical components, modules and subsystems used in telecommunications, data communications, aerospace, industrial and military applications. Since 2002, the company has acquired the optical components businesses from Nortel Networks and Marconi, as well as Ignis Optics, Cierra Photonics, New Focus and Onetta. For more information, visit: www.bookham.com