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Bookham Buys Onetta

Light Reading
News Analysis
Light Reading

This morning Bookham Technology plc (Nasdaq: BKHM; London: BHM) announced that it has agreed to buy Onetta Inc., a manufacturer of Erbium Doped-Fiber Amplifiers (EDFAs) in an all-share transaction worth about $23.5 million

The move comes just a week after Bookham announced it would lay off 600.

Under the terms of the agreement, Bookham will acquire all of Onetta's privately held shares in exchange for 27.6 million shares of Bookham's stock. At Bookham's recent market price of about $0.85, that adds up to about $23.5 million.

Onetta's assets are valued at around $7.5 million, according to Bookham. Onetta shareholders also agreed to pay off liabilities worth approximately $6.0 million.

The rationale behind the Onetta acquisition is to bolster the optical amplifier line that Bookham acquired from Nortel. "We believe that strong operational and product synergies with Onetta will give rise to immediate cost saving opportunities," said CEO Giorgio Anania in a prepared statement. "The combination creates strong economies of scale in our amplifier production."

The attraction for Onetta may have been the opportunity to vertically integrate -- Bookham supplies pump lasers, which are a key component of optical amplifiers. In fact, it owns the world-leading 980nm pump laser buiness in Zurich, formerly owned by Uniphase Laser Enterprise, then passed from JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) to Nortel Networks Ltd. (NYSE/Toronto: NT), and finally picked up by Bookham as part of the Nortel portfolio.

This marks Bookham's fifth acquisition in the optics space in the past couple years, and there's no reason to suppose it's going to stop there, judging by Anania's comments in a recent interview with Light Reading (see Giorgio Anania, Bookham).

In related news, last week the company told employees at its Paignton, U.K., plant that it plans to shed up to 600 jobs -- one third of its total workforce. The job cuts come as the company prepares to transfer all its assembly operations over to Shenzhen, China, to the facility it acquired from New Focus Inc. (see Bookham Gets a New Focus). According to a local TV report, employees have been offered a paltry "incentive" to stay in their jobs until product lines have been fully transferred to the new facility.

Bookham did not return calls.

— Pauline Rigby, Senior Editor, Light Reading

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User Rank: Light Beer
12/5/2012 | 1:44:30 AM
re: Bookham Buys Onetta
Come on LR, let's tell the whole story:

600 people to lose jobs to unfair Dollar to Yuan exchange rate, which exists just to prop up US deficit spending, which is due to war in Iraq.

Iraq was supposed to be for WMD, and to get rid of brutal dictator. but in truth is just to privatize the oil into US-friendly hands. We proved that by 1) not finding any WMD, and 2) being brutal ourselves (six? murders in prison).

And if oil for the people in the US was the problem, where is the 55 mile per hour speed limit, and the 30 mile per gallon minimum for Detroit?

The answer is the war if for oil in the Shrubs family hands to sell at the highest prices he can arange. 750 US and 10,000+ Iraqi lives lost for it. Oh, and a dictator back in power in Iraq by the end of June.

Telecom financial criminality looks small in comparison, no?

User Rank: Light Beer
12/5/2012 | 1:44:06 AM
re: Bookham Buys Onetta
I wonder how much funding Onetta took in total. Did Sequoia get all their money back?

What is going to happen to their other portfolio companies (T-Network, Santur, MEMX, Big Bear)?
User Rank: Light Beer
12/5/2012 | 1:44:03 AM
re: Bookham Buys Onetta

Why don't you keep your political commentary confined to the Al Franken chat board. This is a site for people interested in the telecom industry and the trends and latest news effecting those of us still trying to make a living in it.

And oh, by the way...anything else you want to blame on the US government while you're at it? Mad Cow, price of bottled water, the water peak in fiber?
captain kennedy
captain kennedy,
User Rank: Light Beer
12/5/2012 | 1:43:59 AM
re: Bookham Buys Onetta
Onetta raised at least 68M in VC financing according to their web site. Onetta had significant revenue and were selling to at least one major OEM. Onetta is a fine company with a solid product and their exit is 30 cents on the dollar. Telecom...it isn't just for breakfast anymore.
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