From today’s sale of their semi-conductor laser business to II-VI Incorporated, Oclaro Inc. has increased their valuation by 40 percent. The optical communication and laser product company Oclaro Inc. is restructuring and has sold the Oclaro Zurich, Switzerland Company for $115 million. With $92 million in cash being exchanged today, $15 million in accounts receivable and $8 million held for traditional closing costs, II-VI purchased the Zurich Company for $115 million.
In a separate agreement, II-VI received the option to purchase Oclaro's optical amplifier and micro-optics business for $88 million with paying $5 million in cash today. If the option is not exercised in 30 days, the $5 million will be forfeited to Oclaro. If the option is exercised in the next 30 days, the $5 million will be applied to the purchase price. Oclaro received $97 million in cash today.
From the purchase of the Oclaro's Zurich Company, Pittsburgh based company II-VI received GaAs fabrication facilities, high power laser diodes, laser product lines, intellectual property, equipment and a related R&D facility in Tucson, Arizona. In the last fiscal year, the Zurich business had approximately 87 million in revenue. II-VI Inc. specializes in engineered material and specialized optical components distributing to diversified markets which include: industrial manufacturing, military and aerospace, high-power electronics and telecommunications, and thermo electronics applications.
II-VI held a press conference today detailing the agreement which is available on their web site www.ii-vi.com. Oclaro will hold a press conference detailing the agreement and their forward looking statements on Septemeber 16 at 5:00 pm EST/ 2:00 pm PST. The detailed information regarding this press conference is available on their website www.oclaro.com.
II-VI Incorporated (NASDAQ:IIVI) is currently trading at 19.01 and is averaging 18.56 for the current third quarter. The average closing stock price for the year is 17.47 and averaging 17.68 for the first quarter and16.39 for the second quarter. This is a decrease from last year’s averaging closing price of 19.04, but investment activities can be attributed to this slight decrease in stock price. The average closing price was 22.67, 19.64, 17.96 and 17.35 respectively for the first, second, third and fourth quarter of last year.
Oclaro Inc. (NASDAQ:OCLR) averaged 2.9 for last year with respective first to fourth quarter pricing of 4.34, 2.85, 2.67 and 1.87. Oclaro is averaging 1.26 this year with averaging 1.12 for the third quarter. The average closing price for the first quarter was 1.47, and the average closing price for the second quarter was 1.18. Oclaro could benefit from this sale as they do not have any overhead costs and will still be sourcing the laser product lines from their China office. Investors may be able to capitalize on a buy low as the current closing market price is 1.46 and this company with a global presence has opportunity for a takeover.
Don't forget to click SUBSCRIBE at the top to receive free email updates of new articles from Diane Straka. You must click the link in the email you receive to validate your subscription.