Bookham's Next Buy?

5:00 PM -- Bookham Inc. (Nasdaq: BKHM; London: BHM) might be open to an acquisition in the reconfigurable optical add-drop multiplexer (ROADM) space.

Yes, Bookham is hooking up with Avanex Corp. (Nasdaq: AVNX), which has its own wavelength-selective switch to go into ROADMs. But Morgan Keegan & Company Inc. analyst Paul Bonenfant wrote in a note today that the companies might want some higher-end ROADM options.

That's the hint he got from "recent management commentary" -- which might have included a joint appearance by Alain Couder and Giovanni Barbarossa, the Bookham and Avanex CEOs, at a Thomas Weisel Partners conference yesterday. I wasn't invited, so I don't know.

The theory sounds good, anyway. ROADMs are on a roll, becoming an assumed part of metro optical buildouts. JDSU (Nasdaq: JDSU; Toronto: JDU) has 'em. Finisar Corp. (Nasdaq: FNSR) has 'em.

Whether the combined Bookham/Avanex would have the buying power to close a deal is uncertain. But they'd have plenty of candidates to choose from. Bonenfant lists the same four I would: Capella Photonics Inc. , CoAdna Photonics Inc. , Nistica , and Xtellus Inc.

— Craig Matsumoto, West Coast Editor, Light Reading

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