Oclaro and Opnext merger consolidates more of the optical component market

Oclaro, the company that emerged following the merger between the former Bookham and Avanex, is once again consolidating more of the optical component market by merging with Opnext (Nasdaq: OPXT).

As an all-stock deal, Opnext shareholders will get 0.42 Oclaro shares for every share of Opnext stock held, giving Opnext shareholders a 42 percent stake in the new company.

By merging, the two companies say they will create a "streamlined, single supplier" for their vendor customers that serve the service provider community, particularly the 40 and 100G optical segment. According to a LightCounting report, the 40G and 100G segment is expected to grow at a CAGR of 42 percent through 2015. 

Additionally, the combined company will become the largest supplier of laser diodes for industrial and consumer applications.

When the deal closes, Oclaro's CEO Alain Couder will serve as chairman and CEO of the company, while Opnext CEO Harry Bosco will join the combined company's board of directors.

Once the transaction meets shareholder and regulatory approvals, the two companies expect the merger to be completed in the next three to six months.

Oclaro's deal with Opnext is clearly about scale.

"When we merged Bookham and Avanex, we became a Tier 1 supplier to our customers," Alain Couder, Oclarlo's CEO, said on Monday afternoon's conference call with analysts, adding that "Now it's going to be even more [so], because we are going to have all the core technology needed" to target new customer opportunities.  

By merging with Opnext, the combined company can now more effectively compete with Finisar and JDSU, which have generated revenues of $949.6 million and $755.2 million, respectively, over the past four quarters.  

For more:
- see the release
- Light Reading has this article

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