Monday, January 26, 2009

Bookham and Avanex to Merge

Bookham and Avanex, both leading suppliers of optical networking components, agreed to merge in an all- stock transaction. Avanex shareholders will receive 5.426 shares of Bookham common stock for every share of Avanex common stock and will own approximately 46.75% of the combined company.

The combined company, which will offer an extensive portfolio of terminal and line products for the metro and long haul markets, will be led by Alain Couder who will serve as President and CEO. The company is expected to have two telecom divisions and one non-telecom division. The board of directors will be composed of Alain Couder and three additional directors from the Bookham board, and Giovanni Barbarossa and two additional directors from the Avanex board.

A new name for the combined company will be announced at closing. Together, the new company will have annualized revenue of about $447 million ($181 million for Avanex and $226 million for Bookham).

"The combination of Bookham and Avanex creates synergies that we expect will significantly improve financial performance faster than either of the two companies could accomplish on a stand-alone basis," said Alain Couder, president and CEO of Bookham. "There is minimal product overlap between our businesses allowing us to quickly expand sales opportunities and improve service to our customers. In addition, both companies have strong technology platforms and the best engineering teams that we expect will allow us to drive innovation and expansion for both existing and new growth areas."

Separately, Bookham reported revenue for its second quarter of fiscal 2009 (ended 27-Dec-09) was $50.2 million, compared with $66.5 million in the first quarter of fiscal 2009, and $59.0 million in the second quarter of fiscal 2008. Revenues for the second quarter of fiscal 2009 excluded (i) $4.1 million for products that were shipped to Nortel Networks, a major customer, but for which
payment was not received prior to its bankruptcy filing on January 14, 2009, and (ii) $1.3 million for products that were shipped to a contract manufacturer for which payment may not be received as a result of the Nortel Networks bankruptcy filing.

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