Finisar is to acquire Honeywell’s VCSEL Optical Products business, based in Richardson, TX, for approximately $75 million in cash.
The transaction is subject to applicable regulatory approvals and other customary closing conditions and is expected to close in the first calendar quarter of 2004. Following the completion of the acquisition, Finisar expects to continue to operate the business at the Richardson, Texas facility.
Vertical Cavity Surface Emitting Lasers (VCSELs) are primarily used in fibre optic data communications and position sensing applications. They deliver coherent light with high efficiency and can be modulated at high speeds.
The VCSEL Optical Products business generated approximately $36 million in revenues during 2003, including approximately $9 million from components supplied to Finisar. Finisar expects the business to contribute approximately $25-$30 million in revenues during the first year of operation with a positive impact on gross margins and pretax earnings, excluding the impact of non-cash charges related to the acquisition.
Honeywell VCSEL Optical Products and Finisar have had a long-standing relationship dating back to 1996 when Honeywell introduced the first VCSEL component specifically targeted for fibre optic data communications. Finisar was one of the first customers to adopt the technology which helped to enable the development of Gigabit fibre optic transceivers for links spanning less than 300 metres.