real-time news and commentary for investors
Thursday, Sep 12
Oclaro sells laser business to II-VI for $115M, shares take off
- In addition to acquiring Oclaro's (OCLR +40.6%) gallium arsenide laser diode ops, II-VI (IIVI -3.6%) has paid $5M to obtain an exclusive 30-day option to buy Oclaro's optical amplifier/micro-optics unit for $88M in cash. The option purchase helps pay for the acquisition is exercised. (PR)
- II-VI is paying $100M in cash for the laser diode business, and letting Oclaro hold onto $15M in receivables.
- With Oclaro only having a market cap of $98.4M as of yesterday's close, and with the company having been bleeding cash and struggling to integrate recent acquisition Opnext, investors are quite enthusiastic about the deal.
- Oclaro asserts selling the laser diode business (focused on industrial/consumer applications) will allow it to lower its cost structure and focus on the optical component market. The company plans to continue manufacturing some laser diodes in China, and supply them to II-VI.
- Oclaro plans to use the proceeds to repay its bridge financing. It had $100M in debt on its balance sheet as of March 30, and $76.5M in cash/equivalents.
- The company will finally release its FQ4 (June quarter) results on Sep. 16. The II-VI deal will be discussed during the earnings CC (5PM ET).