Gemfire to Buy Avanex PLC Unit

FREMONT, Calif. -- Avanex Corporation (Nasdaq: AVNX) and Gemfire Corporation today announced the signing of a definitive agreement by which Gemfire will acquire Avanex's silica planar lightwave circuit (PLC) unit in Livingston, Scotland. The passive PLC products from Avanex's U.K. operations will complement the polymer PLC dynamic waveguide products of Gemfire, the first company to qualify polymer optical components to stringent Telcordia standards.

The companies said the transaction is expected to close this quarter and is subject to customary closing conditions. As part of the agreement, Gemfire will acquire all outstanding capital stock of the U.K. subsidiary of Avanex, and Avanex will acquire a minority equity interest in GC Holdings, parent company of Gemfire Corporation.

After completion of the acquisition, Gemfire will specialize in providing integrated planar WDM solutions to the optical networking systems market. The Livingston facility includes one of the most advanced production lines in the world for WDM planar devices, and operations will be transferred without disruption.

Walter Alessandrini, Avanex's chairman and CEO, explained that Avanex had made a strategic decision to focus on other core technologies and spin out the PLC unit. "Our decision regarding the Livingston facility was made in the context of focusing our resources in optical subsystems. This agreement with Gemfire ensures that our customers' requirements for planar waveguide technologies will continue to be supported."

Richard Tompane, president and CEO of Gemfire, added that the acquisition will make Gemfire a full-service planar integrated optics company. "The opportunity to provide higher levels of integration and cost efficiencies has never been greater. By combining these proven Telcordia-qualified building blocks, Gemfire will be able to offer its customers a broader range of WDM solutions."

Gemfire Corp.

Avanex Corp.