Finisar Corporation Announces Acquisition of Genoa, Inc., Closure of Its Demeter, Inc. Division and Management Changes
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 the acquisition, Finisar will gain access to these important technologies as well as a talented engineering and management group and a state-of-the-art wafer fabrication facility.
“Genoa is an important strategic addition to Finisar,” said Jerry Rawls, Finisar’s CEO. “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, Genoa has developed a novel approach for making long wavelength VCSELs at 1310nm and 1550nm 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.
Announces Closure of Its Demeter, Inc. Division
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. 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 announced the retirement of Dick Woodrow who has served as Finisar’s President and Chief Operating Officer since September 2002. Mr. Woodrow joined Finisar as Director of Sales and Marketing—Optics in June 1998 and served as Vice President, Sales and Marketing, from November 2000 until August 2002.
“I very much appreciate Dick’s steadfast guidance over the years,” said Jerry Rawls. “He has made a lasting impact on this organization and will be greatly missed.”
Finisar also announced the hiring of Fariba Danesh to succeed Mr. Woodrow as Senior Vice President and Chief Operating Officer. Ms. Danesh has served as President and CEO of Genoa since June 2002 and as its Senior Vice President, Operations, from June 2000 to June 2002. Prior to joining Genoa, she worked for Sanmina Corporation as Vice President, Manufacturing, from September 1999 to June 2000. From February 1996 to August 1999, She served in various positions at Seagate Technology, her most recent position being Vice President and General Manager, U.S. Media Operations.
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The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding Finisar’s expectations, beliefs, intentions, or strategies regarding the future. All forward-looking statements included in this press release are based upon information available to Finisar as of the date hereof, and Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These risks include those associated with the rapidly evolving markets for Finisar’s products and uncertainty regarding the development of these markets; Finisar’s historical dependence on sales to a limited number of customers and fluctuations in the mix of customers in any period; ongoing new product development and introduction of new and enhanced products; the challenges of rapid growth followed by periods of contraction; intensive competition; and potential problems related to the assimilation and integration of the operations, technologies and products of Genoa and several other recently acquired companies and product lines. Other risks relating to Finisar’s business are set forth in Finisar’s Annual Report on Form 10-K and other interim reports as filed with the Securities and Exchange Commission.
Finisar Corporation (Nasdaq: FNSR) is a technology leader for fiber optic subsystems and network tools for testing and monitoring network systems. These products enable high-speed data communications for networking and storage applications over Gigabit Ethernet local area networks (LANs), Fibre Channel storage area networks (SANs), and metropolitan area networks (MANs). The Company’s headquarters is in Sunnyvale, California, USA. www.finisar.com.