Lumentum bulks up with NeoPhotonics buy

Lumentum is to acquire fellow component and module specialist, NeoPhotonics, for $918 million.

The deal will expand Lumentum’s optical transmission product line, broadening its component portfolio and boosting its high-end coherent line-side product offerings.

Vladimir Kozlov

Gaining NeoPhotonics' 400-gigabit coherent offerings will enable Lumentum to better compete with Cisco and Marvell. Lumentum will also gain a talented team of photonics experts as it looks to address new opportunities.

Alan Lowe, Lumentum’s president and CEO, stressed the importance of this collective optical expertise.

Speaking on the call announcing the agreement, Lowe said the expanded know-how would benefit Lumentum’s traditional markets and accelerate its entrance into other, newer markets.

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Lumentum jolts the industry with Oclaro acquisition

Lumentum announced on Monday its plan to acquire Oclaro in a deal worth $1.8 billion.

The prospect of consolidation among optical component players has long been mooted yet the announcement provided the first big news jolt at the OFC show, being held in San Diego this week. 

Alan Lowe“Combined, we will be an industry leader in telecom transmission and transport as well as 3D sensing,” said Alan Lowe, president and CEO of Lumentum, on an analyst call discussing the deal.

Lumentum says their joint revenues totalled $1.7 billion with a 39% gross margin over the last year. And $60 million in synergies are forecast in the second year after the deal closes, which is expected to happen later this year. 

The $1.8 billion acquisition will comprise 56 percent cash and 44 percent Lumentum stock. Lumentum will also raise $550 million to help finance the deal.

“This is a big deal as it consolidates the telecom part of the component market,” says Daryl Inniss, business development manager at OFS Fitel and former market research analyst.

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