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Lumentum to expand product portfolio with Oclaro
Posted on Monday, 12 March 2018 12:38
US photonics products provider Lumentum has agreed to acquire Oclaro, a supplier of optical telecommunications components and modules for data centre markets, for USD 1.80 billion in cash and stock.
Under terms of the proposal, the Milpitas-headquartered buyer is offering USD 5.60 in cash and 0.06 of a share per scrip held in the San Jose-based target, representing a total price of USD 9.99.
The bid is at a 27.0 per cent premium to Oclaro’s close of USD 7.85 on 9th March, the last trading day prior to the announcement.
Following completion, which remains subject to stockholder and regulatory approvals and is slated for the second half of 2018, the group’s investors are expected to own roughly 16.0 per cent of the combined company.
Lumentum will fund the purchase with a combination of cash on hand and USD 550.00 million in debt financing.
The transaction is expected to generate more than USD 60.00 million of annual run-rate synergies within 12 to 24 months after closing, while immediately boosting non-generally accepted accounting principle earnings per share.
Lumentum and Oclaro will together offer best-in-class photonics capabilities to accelerate innovation and industry roadmaps, according to the press release, while expanding research and development capabilities.
Alan Lowe, chief executive of the acquiror, said: “Joining forces with Oclaro strengthens our product portfolio, broadens our revenue mix, and positions us strongly for the future needs of our customers.”
His counterpart at the target, Greg Dougherty, added: “Together, we will be an even stronger player in fibre optic components and modules for high-speed communications and a market leader in 3D sensing.”
Oclaro creates optical telecommunications components and modules for the long-haul, metro and data centre markets in laser technology and photonics integration, which provides phone networks and high-speed connections for streaming video, cloud computing and application virtualisation.
In the three months to 30th December 2017, the group generated adjusted earnings before interest, taxes, depreciation and amortisation of USD 31.83 million on revenue of USD 139.36 million.
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