Bookham Buys Onetta
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