UK Components Foundry for Sale
OMD appointed Richard Hill and Peter Rilett of KPMG on July 4 to oversee the sale of the business and assets, after a second round of funding fell through at the last minute.
The lead investor in the second round had pulled out just a couple of days earlier, citing "adverse market conditions" as its reason. That investor was to have stumped up 50 percent of the total funding, so without it, the company was no longer viable, says Neil Vinnicombe, a KPMG manager now handling OMD's day-to-day business.
OMD's chief executive, Kevin Ford, was ousted about six weeks ago because he wasn't liked by a prospective new investor, sources say.
Company executives are hoping to keep the business together, so no staff has been laid off. But the startup has only about six weeks to secure a buyer before it will have to close, permanently.
OMD might be a real catch for somebody. According to one of its founders, COO Bill McLeod, the startup had recently perfected its manufacturing processes for making integrated optical components such as Arrayed Waveguide Gratings (AWGs) and was preparing to ship first samples to customers on schedule in August. It is already making products for customers that want silicon microbench work, such as making V-grooves for aligning optical fibers. Finding both the waveguide expertise and the V-groove capability under the same roof is unusual, according to McLeod.
Possibly the biggest selling point is that OMD is one of a handful of optical fabs that use 200mm (8 inch) wafers, giving its customers lower costs and faster production times. "We can turn out several hundred wafers per month," says McLeod. "With just a little extra capex, we could increase that threefold, to 600 wafers per month."
The only other optical fabs that use 200mm wafers are Intel Corp. (Nasdaq: INTC) and Scion Photonics Inc., which was recently sold to JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) (see JDSU Posts Loss, Buys Startup).
It's not known which dithering venture capitalist pulled the rug from under OMD. Possible candidates are Advent International or Storm Ventures, which both participated in OMD's earlier funding back in January 2000, although it could easily have been a new investor.
Previous investors in OMD also included U.K. fund manager Taube-Hodson-Stonex Partners (THS Partners), U.K. venture capitalist Quester, Wales Ventures, and E-Tek Dynamics, which was sold later that year to JDS Uniphase (see JDSU/E-Tek Merger Approved: No Surprises).
OMD's other founder and CFO, Neil Lethby, quit the company in mid 2001, having decided to rest on his laurels after making a mint from the flotation of Bookham Technology PLC (Nasdaq: BKHM; London: BHM).
— Pauline Rigby, Senior Editor, Light Reading