By Stephen Hardy
Editorial Director and Associate Publisher
Signaling a bumpy 2001 hasn't dashed its ambitions, Bookham Technology plc (Abington, Oxfordshire, UK) announced it will acquire the assets of Marconi Optical Components Ltd. (Caswell, UK) in an all-stock transaction worth just under 20 million pounds sterling.
Giorgio Anania, president and CEO of Bookham, told participants in a conference call today that the acquisition of Marconi's active-device portfolio will complement Bookham's current work in passive components. To get the new combined venture moving in the right direction, the deal also calls for Marconi's optical systems business to buy components and subsystems from Bookham over the next 18 months with a combined value of at least 30 million pounds sterling.
Anania and Steve Turley, Bookham's chief commercial officer, say that with their customer base looking for more integrated subsystems and modules, the ability to meld the company's silicon-based ASOC technology with Marconi's active device expertise will position the company to better meet future market requirements. Turley says that the development of subsystems that would support dynamic adding and dropping of wavelengths would be a natural progression for the newly joined design teams.
Bookham currently manufactures multiplexers, demultiplexers, optical channel monitors, variable optical attenuators (VOAs), and mux/VOA combinations using its ASOC technology. The Marconi Optical Components group currently offers such devices as fixed and tunable lasers, modulators, amplifiers, transmitters, and receivers.
Both companies have already performed integration work. The optical channel monitor represents three functions on the same chip, says Turley, while Marconi has been working on a "set and forget" narrowly tunable laser with a built-in modulator that will likely be announced next year. Bookham has already begun work on the dynamic add/drop capability, using lasers purchased from an outside source. Use of laser technology from Marconi would seem a natural follow-on from the acquisition, Turley implied. The fact that the Caswell facility is only 50 miles from Bookham's headquarters should simplify the integration of the two entities' expertise, Turley adds.
Turley says that it is too early to predict how Bookham may decide to redirect the R&D efforts of its new Caswell resources. However, he says that Bookham will review current R&D priorities in light of Bookham's corporate goals.
The 30 million pound supply contract represents a "minimum commitment," according to Bookham CFO Steve Aberly. The agreement calls for quarterly payments for the supply of both Marconi and Bookham devices, Aberly says. Marconi is already a Bookham optical channel monitor customer, while Marconi Optical Components unit has been supplying Marconi's systems operation with subsystems, including EDFAs.
The deal is subject to stockholder and regulatory approval. Anania says he expects the acquisition will be completed in the middle of next year's first quarter. The 12,891,000 ordinary shares that Bookham will surrender to Marconi represent approximately 10 percent of Bookham's current issued share capital.