10 Aug 2007
The deal brings optical chip, laser chip and optical coupler elements into Arasor's portfolio of networking and optoelectronics components.
In a dual acquisition worth a total of $63 million, Arasor has purchased both Alfalight and AOFR, in order to bring together the three elements that underpin the company's range of telecommunications and optoelectronic products. "We now control the optical chip, laser chip and coupler elements common to all our products," said Simon Cao, CEO of Arasor. "Bringing them in-house will enable improved profitability and control of future laser developments in our emerging markets."
The companies' joint statement said that Alfalight, a US manufacturer of high-power laser diodes, will operate as a wholly owned subsidiary of Arasor. AOFR has been acquired from Verrillon and is an Australian mass producer of optical couplers with a production and packaging facility in Asia.
Arasor's growing markets in China and India, where the telecoms infrastructure is increasingly moving directly from copper to wireless, played a big part in the acquisitions. Alfalight and AOFR will now aim to broaden their customer bases in those countries. Both companies are also said to bring with them blue chip customers and a variety of tier 1 telecommunications companies.
"The deal with Alfalight expands our customer base as we leverage our products into Alfalight's existing sales channels in the US, and their products to our current customers and channels in China and India," commented Cao. "Acquiring AOFR broadens our customer base to include most of the tier 1 telecom players in the US, and leverages our relationships in China and India to broaden AOFR's customer base in these hyper-growth markets."
Some corporate consolidation will follow from the acquisitions, according to Arasor's investors' briefing. AOFR production and Alfalight packaging will be moved to Arasor's facility at Nansha, China, and a Taiwanese foundry will be secured for Alfalight's laser fab. The existing AOFR sales network will carry Arasor and Alfalight products in the US.
Between them the two acquisitions will contribute approximately $20 million in revenue, while Arasor claims that significant new revenue streams will enable future business growth.