Finisar Agrees to Acquire RED-C Optical Networks, Inc.
Acquisition Adds Key Amplifier Technologies to and Broadens Telecom Product Lines
SUNNYVALE, CA -- (Marketwire) -- 07/03/12 --
Finisar Corporation (NASDAQ: FNSR) announced today that it has entered into an agreement to acquire all of the outstanding equity interests in RED-C Optical Networks, Inc., a Delaware corporation, with subsidiary operations in Tel Aviv, Israel. The acquisition will broaden Finisar's product lines primarily for telecom applications by adding key amplification technologies, including Erbium Doped Fiber Amplification (EDFA), Raman amplification and dynamic Hybrid amplification. These technologies are considered critical for ROADM line cards and are increasingly important in cost-effectively extending the reach of transceivers and transponders especially
for 100 Gb/s and 40 Gb/s coherent transmission, ultra-long repeaterless links, and low latency networks.
"RED-C has been an innovator in optical amplification, which we view as an increasingly critical technology as networks get faster and more complex," said Eitan Gertel, Finisar's Chief Executive Officer. "As we have further penetrated the line card market with our differentiated WSS technology, we see this acquisition as a tremendous opportunity to further innovate for our customers and advance our vertical integration strategy."
"We expect RED-C's high performance EDFAs and Raman amplifiers, currently deployed in optical networks around the globe, to continue to deliver strong growth for the RED-C business," said John Clark, Finisar's Executive Vice President, Technology and Global R&D. "Going forward, we anticipate additional growth opportunities for the novel Hybrid Raman EDFA platform. The continuing rapid growth in global bandwidth demand is driving a major transition to coherent transmission and mesh topologies for optical networks. These new networks can deliver lower cost per bit and improved resilience, but are expected to require advanced optical amplification technologies to deliver optimum performance. RED-C's Hybrid amplifier products, based on RED-C's core underlying IP, are unique in providing improved performance versus
standalone EDFA and Raman optical amplifiers. We expect RED-C's Hybrid optical amplification platform to replace standard EDFAs for next-generation LH and ULH optical networks. Finisar is pleased to be joining with RED-C to deliver this next wave of optical amplifier technology."
"We have been impressed with the RED-C amplifiers in terms of their performance and quality. For next-generation networks, there will be an increased need for advanced EDFA, Raman and Hybrid amplifier solutions that RED-C provides," said Transmode's VP R&D Mohamad Ferej. "With the addition of optical amplifiers from RED-C, Finisar is now offering a complete portfolio of optical components and sub-systems to support our mission to develop innovative network solutions."
The acquisition will be effected by the merger of RED-C with a wholly owned subsidiary of Finisar. In connection with the acquisition, Finisar will pay in cash approximately $23.7 million in initial consideration for all of RED-C's outstanding equity. As of March 31, 2012, RED-C had $3.2 million of cash and no debt. Finisar will also pay to stockholders and certain RED-C employees up to an additional aggregate of $20 million payable in cash or in shares of Finisar common stock at Finisar's option, subject to the achievement of financial performance targets related
to RED-C products and technologies during calendar 2013 and continued employment with Finisar.
Founded in 2000, RED-C has over 140 subsidiary employees, all of whom are located in Israel. Following the acquisition, the RED-C business will operate as a subsidiary of Finisar, with principal operations continuing at its current facility in Israel. Finisar expects the acquisition of RED-C to be slightly positive to non-GAAP earnings per share in its fiscal year ending April 30, 2013. The acquisition is expected to be completed prior to July 31, 2012, subject to certain closing conditions.
RED-C Optical Networks (www.red-c.com) is a leading provider of state of the art EDFAs, Raman and Hybrid amplifiers, and optical monitoring devices for all network segments (long haul, regional, metro and access) and for all network applications (telecom, cable and enterprise). In addition to a broad variety of EDFA and Raman and Hybrid modules, RED-C offers innovative and comprehensive solutions for some of the industry's most difficult technological challenges today, such as ultra long repeaterless links and100 Gb/s coherent networks.
Finisar Corporation (NASDAQ: FNSR) is a global technology leader of fiber optic subsystems and components that enable high-speed voice, video and data communications for networking, storage, wireless, and cable TV applications. For more than 20 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth and storage. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com. Stay up to date with
Finisar by reading the Lightspeed blog and following us on Twitter and Facebook.
Safe Harbor Under the Private Securities Litigation Reform Act of 1995
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 Exchange Act of 1934, as amended. 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. Examples of such risks include those associated with: the integration of the operations of RED-C and the realization of synergies expected to result from the acquisition; the uncertainty of customer demand for Finisar's and RED-C's products; the rapidly evolving markets for Finisar's and RED-C'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 products and 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; and intensive competition. Further information regarding these and other risks relating to Finisar's business is set forth in Finisar's annual report on Form 10-K and quarterly SEC filings.
Executive Vice President and CFO
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