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Optical components

Finisar Acquires Genoa

The linear optical amplifier (LOA) is getting a new home, as Finisar Corp. (Nasdaq: FNSR) announced yesterday that it plans to acquire Genoa Corp.

The deal would close the book on Demeter, the active-components startup purchased by Finisar in November 2000. By July, Finisar plans to close Demeter's facilities in El Monte, Calif., moving the Fabry-Perot and distributed feedback (DFB) laser operations north to Genoa's Fremont, Calif., offices.

A "handful" of Demeter employees would make the move to Fremont, but the remaining 40 will be laid off, says Finisar CFO Steve Workman. Genoa itself has roughly 40 employees, so Finisar's overall headcount would be nearly unchanged.

Genoa CEO Fariba Danesh will remain as Finisar's new COO if the sale is completed. She would replace Dick Woodrow, who is retiring (see Finisar Acquires Genoa).

Finisar is offering 7 million shares of common stock, making the deal worth roughly $6.6 million, based on the company's stock price of 94 cents at market close today. The deal is expected to close this month.

Genoa's linear optical amplifier is a variation on the idea of Semiconductor Optical Amplifiers. The LOA is a single-chip design that uses a VCSEL to linearize the amplifier output. If you picture the light signal traveling horizontally, the VCSELs would sit underneath the path of light, shining upward.

The technology was impressive enough to land Genoa on our 2001 Top 10 Private Companies list (see Genoa). It helped that the company had raised $95 million along the way, capped by a $75 million third round in 2001 (see Genoa Amps Up).

Among the fans of the LOA is NEC Corp. (Nasdaq: NIPNY), which used Genoa's chip in a 10-Gbit/s transponder module (see NEC Incorporates Genoa Amp). But overall, Genoa hasn't found great success with its amplifier, in part because the market has turned hostile to startups. Moreover, the company faces competition from other SOA vendors such as Kamelian Ltd.

Finisar is interested in the LOA as a product, but the deal offered other pieces as well, CFO Steve Workman says.

For one, Genoa's manufacturing capability is more involved than Demeter's -- hence, the moving of Demeter's products to the Genoa fab. Finisar benefits by getting a bit more vertical integration, as Genoa excels in process steps such as epitaxial growth, Workman says.

Genoa also brings VCSEL technology, something Finisar had begun shopping for. The VCSELs will probably be used inside other products, although Finisar isn't ruling out the possibility of selling VCSELs on the merchant market.

As icing on the cake, Finisar knew of Woodrow's pending retirement and was in the market for a new COO.

The LOA will live on as a Finisar product line, but it's going to receive some tweaking. Specifically, Finisar sees potential for enhancing the device with some of the passive components acquired from New Focus Inc. (Nasdaq: NUFO) in May 2002. Finisar has already tried out some possibilities in the lab, Workman says.

— Craig Matsumoto, Senior Editor, Light Reading

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whyiswhy 12/5/2012 | 12:19:02 AM
re: Finisar Acquires Genoa Tested the LOA and found four wave mixing limited the usefullness for DWDM to pre-amplification output levels. Of course, the noise figure is pretty bad for pre-amp work. But an application in combination with some sort of passive in a single wavelength is not out of the question.

Except for the lack of reliability data, device yield and packaging cost problems...think you got snookered Jerry.
lightbridge 12/5/2012 | 12:19:01 AM
re: Finisar Acquires Genoa ...Tested the LOA and found four wave mixing limited the usefullness for DWDM to pre-amplification output levels.
--------------------------------------------

Where is it published? What channel spacing was used in those tests?
Eric W 12/5/2012 | 12:19:01 AM
re: Finisar Acquires Genoa Press releases indicated that Genoa also had some LW VCSEL technology. LW VCSEL capability would seem to fit into Finisar's transceiver market leadership aspirations more so than the LOA.
realoptics 12/5/2012 | 12:18:59 AM
re: Finisar Acquires Genoa Boy! $6 some millions is almost less than the last digtital of the $95 millions, it is like the poket money that Genoa investors(guess who is crying?) have put in.

The CEO lady is 'smart', she used the $95 millions to find her a new job which may not last at all because her spending style is opposite to Finisar. Jerry actually get a super deal even assuming Genoa got nothing ontheir technology front, the used equipment may worth the amount they paid.
BobbyMax 12/5/2012 | 12:18:50 AM
re: Finisar Acquires Genoa Although Finisar is in difficult situation as it share value has fallen to $.94. Considering the present business climate, it is not clear if Finisar would survive and be profitable.
gea 12/5/2012 | 12:18:45 AM
re: Finisar Acquires Genoa Booby you are an idiot. Finisar is one of the most consistently well-managed, aggressive (yet conservative) companies out there.

I find myself asking the opposite question: If Finisar bought them, then they must see something particularly advantageous to their technology. So...I'm going to read up more on Genoa...
whyiswhy 12/5/2012 | 12:18:40 AM
re: Finisar Acquires Genoa Paper was ThC4 at OFC 2003:

Nonlinear Inter-Channel Cross Talk of Linear Optical Amplieier (LOA) in DWDM Applications, Awaji etal

Blue cover technical digest (VolII), pp 441

-Why

PS: Agree the LW VCSEL stuff is better for Finisar, but again, reliability and yield????

Jeryy is a very smart guy, but I think the low price of a component play got him hooked into a place he should not have gone...and as to the value of the surplus equipment being worth the price...rothflmao.
DarkWriting 12/5/2012 | 12:18:40 AM
re: Finisar Acquires Genoa Finisar is one of the most consistently well-managed, aggressive (yet conservative) companies out there.

------------------------------------------------

How do you explain Demeter?

DW
Layer0 12/5/2012 | 12:18:32 AM
re: Finisar Acquires Genoa Dear Gea,

you sound like someone who owns a great deal of worthless FNSR stock. Who's the idiot?

Go ahead read up on Genoa but don't forget to open your brokerage statements.

Best Regards
**************
Booby you are an idiot. Finisar is one of the most consistently well-managed, aggressive (yet conservative) companies out there.

I find myself asking the opposite question: If Finisar bought them, then they must see something particularly advantageous to their technology. So...I'm going to read up more on Genoa...
Layer0 12/5/2012 | 12:18:32 AM
re: Finisar Acquires Genoa Dear Gea,

you sound like someone who owns a great deal of worthless FNSR stock. Who's the idiot?

Go ahead read up on Genoa but don't forget to open your brokerage statements.

Best Regards
**************
Booby you are an idiot. Finisar is one of the most consistently well-managed, aggressive (yet conservative) companies out there.

I find myself asking the opposite question: If Finisar bought them, then they must see something particularly advantageous to their technology. So...I'm going to read up more on Genoa...
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