(By Balaseshan) Finisar Corp. (NASDAQ:FNSR) said it has agreed to buy RED-C
Optical Networks Inc. for initial consideration of about $23.7 million cash, in
order to broaden telecom product lines by adding key amplifier technologies.
Finisar would pay in cash about $23.7 million in initial consideration for
all of RED-C's outstanding equity. As of March 31, 2012, RED-C had $3.2 million
of cash and no debt. The acquisition will be effected by the merger of RED-C
with a subsidiary of Finisar.
Finisar would also pay to stockholders and certain RED-C employees up to an
additional aggregate of $20 million payable in cash or in shares of Finisar
common stock at Finisar's option, subject to the achievement of financial
performance targets related to RED-C products and technologies during calendar
2013 and continued employment with Finisar.
Finisar expects the acquisition of RED-C to be slightly positive to adjusted
earnings per share in its fiscal year ending April 30, 2013. The acquisition is
expected to be completed prior to July 31, 2012, subject to certain closing
Founded in 2000, RED-C has over 140 subsidiary employees, all of whom are
located in Israel. After the acquisition, the RED-C business will operate as a
subsidiary of Finisar, with principal operations continuing at its current
facility in Israel.
The acquisition will broaden Finisar's product lines primarily for telecom
applications by adding key amplification technologies, including Erbium Doped
Fiber Amplification (EDFA), Raman amplification and dynamic Hybrid
These technologies are considered critical for ROADM line cards and are
increasingly important in cost-effectively extending the reach of transceivers
and transponders especially for 100 Gb/s and 40 Gb/s coherent transmission,
ultra-long repeaterless links, and low latency networks.
FNSR closed Monday's regular session at $14.36. The stock has been trading
between $12.26 and $23.50 for the past 52 weeks.