Finisar Corp. acquires Genoa Inc., closes its Demeter Inc. division
2 April 2003 Sunnyvale, CA Lightwave--Per the agreement, Finisar will gain access to Genoa's linear semiconductor optical amplifier (LSOA) and vertical cavity surface emitting laser (VCSEL) technology. Finisar will also acquire Genoa's engineering and management groups and wafer fabrication facility.
2 April 2003 Sunnyvale, CA Lightwave--Finisar Corp., developer of Gigabit fiber-optic equipment for high-speed data networks, today reported that it has entered into a definitive agreement to acquire privately held Genoa Inc., headquartered in Fremont, CA.
Founded in 1998, Genoa has developed novel linear semiconductor optical amplifiers (LSOAs) for amplifying DWDM wavelengths for both metro and telecom applications. As a byproduct of that technology, they have also developed a unique approach for making long wavelength vertical cavity emitting lasers (VCSELs). With this acquisition, Finisar will gain access to these technologies as well as a talented engineering and management group and a state-of-the-art wafer fabrication facility, contend company representatives.
"Genoa is an important strategic addition to Finisar," explains Jerry Rawls, Finisar's chief executive officer. "Genoa's LSOAs are already being evaluated by a number of potential customers. Use of their technology to amplify light at the chip level, in conjunction with other optical components we recently acquired from New Focus, should enable us to offer a distinct cost and performance advantage compared to using erbium-doped fiber optic amplifiers (EDFAs). Efficient light amplification is an important requirement of DWDM metro networks. In addition," he says, "Genoa has developed a novel approach for making long wavelength VCSELs at 1310 nm and 1550 nm, which should result in improved reliability and cost."
Under the terms of the agreement, Genoa will merge with a wholly owned subsidiary of Finisar, and Finisar will issue approximately seven million shares of its Common Stock. The closing price of Finisar's Common Stock on March 31, 2003 was $0.78 per share, giving the transaction an aggregate value of approximately $5.5 million. In addition, Finisar will issue warrants to purchase an additional one million shares of Common Stock at an exercise price of $1.00 per share. The transaction will be a taxable reorganization. The transaction is expected to be completed during April 2003 and is subject to approval by Genoa's stockholders and other customary conditions. Alliant Partners represented Genoa in the transaction.
In conjunction with the acquisition of Genoa, Finisar also announced that it will close its Demeter Technologies Inc. Division located in El Monte, CA., and consolidate all active device development and manufacturing into the Genoa facility in Fremont, CA. Most of this consolidation will take place during the first fiscal quarter ending July 31, 2003.
Demeter currently manufactures lasers and photodetectors for use in Finisar products. Demeter's intellectual property, manufacturing processes and certain assets related to the manufacture of Fabry Perot (FP) and distributed feedback (DFB) lasers and positive intrinsic negative (PIN) and avalanche (APD) photodetectors will be transferred to the Genoa facility. The Company expects to take a charge totaling approximately $16 million associated with the closure of its operations at Demeter of which $14 million is related to a writedown in the value of certain assets and other non-cash charges. This charge will be recognized over the fourth quarter ending April 30, 2003, and the first quarter ending July 31, 2003. In addition, Finisar expects to operate both Demeter and Genoa in parallel during a transition period of up to three months resulting in incremental operating expenses of approximately $2 million.
Finisar has also announced the retirement of Dick Woodrow who has served as Finisar's president and chief operating officer since September 2002. Fariba Danesh has been hired to succeed Woodrow as senior vice president and chief operating officer. Ms. Danesh has served as president and chief executive officer of Genoa since June 2002 and as its senior vice president, operations, from June 2000 to June 2002.