Finisar to buy u2t Photonics for $20 million

Optical components and subsytems vendor Finisar Corp. (NASDAQ: FNSR) says it will expand its portfolio of coherent transmission technology through the acquisition of Germany’s u2t Photonics AG. Finisar will pay approximately $20 million in cash, subject to certain adjustments, for the developer of Indium Phosphide (InP) based receivers and photodetectors. The company also will assume u2t’s net debt of approximately $7 million.

u2t Photonics had total revenues of approximately $33 million last year. The company has been one of the leading suppliers of high-speed receiver technology for several years, first for 40 Gbps (see “Stratalight opts for u2t Photonics photodetectors”) and then for coherent 100-Gbps applications (see “u²t Photonics samples 100G coherent receiver”). The company also had begun work on technology for 400G and above (see "u2t Photonics offers 70 GHz, 3-dB bandwidth balanced photodetector").

Finisar and u2t announced last July that they had negotiated with Fraunhofer Heinrich-Hertz-Institute for exclusive access to the German R&D center’s InP-based Mach-Zehnder modulator technology (see “Finisar, u²t corner Fraunhofer HHI 100G coherent modulator technology”). The acquisition will “consolidate” that partnership, Finisar says.

Finisar also sees the u2t products pairing nicely with its narrow-line width tunable lasers to help create integrated modules for high-data-rate applications. "Finisar is very excited about the near-term applications for the u2t technology and products for the 100G coherent telecom markets," stated John Clark, Finisar's executive vice president for technology and global R&D. "We are even more excited about the potential to use this technology to help drive data rates higher than 100 Gbps and form factors smaller than the CFP2 module and enabling new market applications in both telecom and datacom."

The German company is no stranger to component-level consolidation. u2t acquired COGO Optronics GmbH, the former German operating subsidiary of COGO Optronics Inc., last year. In 2009, it acquired high-speed GaAs optical modulator assets from RFMD (see “u2t acquires high-speed GaAs optical modulator business”).

"We are pleased with the acquisition by Finisar,” said Andreas Umbach, CEO and co-founder of u2t. “During our collaboration to acquire the assets of COGO Optronics GmbH and develop the InP modulator technology from the Fraunhofer Heinrich-Hertz-Institute, we realized that Finisar's technical strength, ability to cost-effectively commercialize technology, and global access to customers and markets would combine extremely well with our industry-leading technology and design capabilities. Furthermore, the acquisition provides a one-of-a-kind opportunity for our employees and innovative technologies to make a greater impact on the optical communication markets.”

Finisar expects the transaction to close this month.

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