Optium to acquire Kailight Photonics, expands portfolio with 40G technologies

MARCH 27, 2007 -- The acquisition will build on Optium's suite of optical transport products.

MARCH 27, 2007 -- Optium Corp. (search for Optium), a supplier of optical subsystems, has entered into a definitive agreement to acquire Kailight Photonics Inc. (search for Kailight), a provider of 40-Gbit/sec optical transmission products.

Kailight's family of optical modules includes advanced 300-pin 40-Gbit/sec transceivers addressing line- and client-side applications. The modules enable functionality -- such as integrated polarization-mode dispersion (PMD) compensation and multiple modulation formats � reportedly unavailable on existing competitive transceiver products.

The acquisition will build on Optium's suite of optical transport products, which features fully wavelength-agile DWDM, SONET, and 10-Gigabit Ethernet transceivers and subsystems; 10-Gbit/sec pluggable transceivers; cable-TV trunking and distribution subsystems; and its next-generation wavelength-selective switch (WSS) reconfigurable optical add/drop multiplexer (ROADM) product line. In addition, Optium claims, this acquisition will enable it to provide full line-card solutions of all variations of 40-Gbit/sec applications.

"The combination of Optium's product lines and Kailight's 40-Gbit/sec product line will immediately enhance the value we bring to our customers," states Eitan Gertel, chairman and chief executive officer, Optium. "It represents another step in our commitment to supply best-in-class, core-to-the-edge optical transmission solutions and is consistent with our strategy to target the fastest-growing segments of the optical transport market."

The aggregate purchase price for the acquisition will be approximately $35 million in cash at closing, including payment for all outstanding capital stock and vested in-the-money stock options, as well as the payment of Kailight stockholder indebtedness and employee change of control awards. Optium will assume all of Kailight's out-of-the-money stock options as well as its unvested stock options. In addition, Optium will be obligated to pay up to an additional $5 million to current holders of Kailight capital stock and in-the-money stock options based on the acquired business reaching certain milestones through Optium's second fiscal quarter of 2009. The acquired business is expected to contribute to earnings early in calendar year 2008.

The acquisition is expected to close within the next 45 days, subject to customary closing conditions and regulatory approvals.

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