Alfalight and Arasor drop merger plans

21 Nov 2007

The two optoelectronic companies have cancelled Arasor's planned takeover, but Alfalight remains hopeful it can contribute to its suitor's new display projection venture.

Optical system-on-chip maker Arasor and laser-diode specialist Alfalight have mutually agreed not to pursue the merger that they announced on July 30.

“The acquisition agreement was based on an all-stock transaction, and the volatility in the equity markets made the transaction less financially viable," said a spokesman for Alfalight.

The “volatility” appears to involve the slump in Arasor's share price, which dropped from AUS$3.09 when the deal was announced to AUS$2.00 when it was broken off on October 10. Arasor's exclusively Australia-listed stock then fell still further to a low of AUS$1.36 on November 12.

Arasor's purchase of AOFR, a manufacturer of optical couplers, will continue, but the company is now limited to exploring other arrangements with Alfalight that fall short of the level of vertical integration it had originally sought to achieve.

“Arasor looks forward to a strategic partnership with Alfalight which will allow new products across a broader client base in the USA and Asia,” commented Simon Cao, CEO of Arasor.

Arasor has recently set up a $300 million joint-venture with Chinese telecom giant ZTE Corporation to develop laser displays for handsets.

The initial phase of the collaboration is slated to begin production in the first half of 2008 and will ramp to annual production of 6 million laser sources and 2.4 million light engines. The displays will be made at the joint-venture's Chinese facilities, adding another China site to the Arasor's globally-spread operations.

A later phase of the collaboration has yet to be finalized, although displays for use in televisions and notebook PCs are also slated for development.

Despite letting the merger fall away, Alfalight was keen to point out the suitability of its technology for such purposes.

“Alfalight's recently introduced 808 nm diode using wavelength stabilization technology is an ideal air-cooled solution for pumping a microlaser that can produce green light,” the Madison, Wisconsin, company said. “It makes for improved performance and an economically attractive solution for the green laser required as part of a laser based display.”