NEWS
Oclaro Acquires WSS Company Xtellus
SAN JOSE, Calif., Dec. 17 - Oclaro, Inc. (Nasdaq: OCLR) today announced it has acquired Xtellus, Inc. Terms of the transaction are described below, with additional details and related financial information provided in a footnote at the end of this release.
Oclaro now has a complete family of wavelength selective switches (WSS) capable of powering reconfigurable optical add/drop multiplexer (ROADM) applications over the entire optical network, from the edge to the core. Many customers have been asking Oclaro to become a provider of a total solution, with a comprehensive line of WSS products, to help satisfy their regeneration and routing needs. Oclaro has now responded. Combining the WSS portfolio with Oclaro's integrated subsystem design capability also positions the company for a strong position in the high growth ROADM market.
WSS is one of the fastest growing segments of the optical component market and the acquisition of Xtellus will play an important role in the continuing growth story of Oclaro. The acquisition also completes the overall portfolio of product areas required to support Oclaro's strategic positioning throughout the metro and long haul areas of the telecommunication market.
Xtellus uses a strategic mix of core technologies, both liquid crystal and MEMS, that will now uniquely enable Oclaro to deliver a complete family of scalable WSS to power ROADM applications across edge and core optical networks. Smaller port count edge WSS applications, where managing product costs aggressively is a key to success, are based on liquid crystal technology. For core WSS applications, Xtellus uses a combination of high reliability 1-Axis MEMS to switch across high port counts, while also maintaining liquid crystal for attenuation.
Under the terms of the acquisition agreement, stockholders of Xtellus will receive shares of common stock of Oclaro worth $33 million, a portion of which will be held in escrow for 18 months to support Xtellus' indemnification obligations to Oclaro. The agreement also provides for a value guarantee under which stockholders could receive additional consideration subject to both the share price of Oclaro failing to achieve a certain price level at the end of calendar year 2010 and on the Xtellus business achieving certain revenue targets over Oclaro's corresponding 12 month fiscal period. Further details on these terms, and related financial aspects, are provided in a footnote below.
About Oclaro
Oclaro, Inc., with headquarters in San Jose, Calif., is a tier one provider of high performance optical components, modules and subsystems to the telecommunications market, and is one of the largest providers to metro and long haul network applications. The company, formed on April 27, 2009, following the combination of Bookham, Inc. and Avanex Corporation, leverages proprietary core technologies and vertically integrated product development to provide its customers with cost-effective and innovative optical devices, modules and subsystems. The company serves a broad customer base, combining in-house and outsourced manufacturing to maximize flexibility and drive improved gross margin. Its photonic technologies also serve selected high growth markets, including industrial, defense, life sciences, medical and scientific, with diversification providing both significant revenue streams and strategic technological advantage. Oclaro is a global company, with cutting edge chip fabrication facilities in the U.K., Switzerland and Italy, and in Tucson, Ariz. during the transition of related activities to Europe, and manufacturing sites in the U.S., Thailand and China.
Oclaro and all other Oclaro product names and slogans are trademarks or registered trademarks of Oclaro, Inc. in the USA or other countries.
About Xtellus
Xtellus is a leading supplier of ROADM technology and dynamic optical modules for Agile Optical Networking Systems. Agile Optical Networks are reconfigurable DWDM networks that are used to provide rapid provisioning and efficient operation of triple-play high-speed Internet, video and telephone services. Xtellus is headquartered in Denville, NJ, with manufacturing and development facilities in Israel and South Korea.
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