Optical communications provider Oclaro Inc. announced that it has sold its Zurich-based subsidiary and laser diode business to II-VI Inc. for $115 million as part of its restructuring plan.
Under the deal, Oclaro received $92 million in cash and will retain the existing accounts receivable, estimated at approximately $15 million. The remaining $8 million is being held by II-VI subject to traditional post-closing conditions.
“The sale of our gallium arsenide [GaAs] laser diode business is an important first step in our plan to restructure the company,” said Oclaro CEO Greg Dougherty. “We will use the proceeds from the sale to fully repay our bridge financing and to begin restructuring the company for the future. We intend to further simplify our operating footprint, reduce our cost structure and focus our R&D investment in the optical communications market.”
Oclaro Zurich includes its GaAs fabrication facility, high-power laser diodes, vertical-cavity surface-emitting laser and 980-nm pump laser product lines, including intellectual property, inventory, equipment and a related R&D facility in Tucson, Ariz. Revenue for the Zurich business was $87 million for the fiscal year that ended June 29.
Oclaro said it will continue the back-end manufacturing of the 980-nm pump and some high-power laser diode products at its Shenzhen, China, manufacturing facility and supply them to II-VI under a manufacturing services agreement.
Oclaro also received $5 million in cash for an option to sell its amplifier and micro-optics business to II-VI for $88 million in cash. The option will expire if not exercised within 30 days, Oclaro said. If II-VI exercises the option, that money will be applied to the purchase price; if it doesn’t, Oclaro will keep the cash.