10 Jan 2014
$27M cash-plus-debt deal sees German maker of high-speed detectors become part of the Californian component firm.
To complete the deal, Finisar will pay around $20 million in cash for u2t, and will also assume a net debt of approximately $7 million. Following rapid sales growth since 2010, u2t is said to have posted revenues of approximately $33 million in calendar year 2013.
The transaction is expected to close before the end of this month, and will provide Finisar with a line of 100 Gb/s receivers and photodetectors based on indium phosphide (InP) semiconductors to add to its existing portfolio of high-speed photonics technologies.
The announcement comes just six months after Finisar and u2t signed a memorandum of understanding that gave the Californian firm exclusive access to InP-based Mach-Zehnder modulators (MZM) technology developed at HHI. At the same time, u2t had acquired the German subsidiary of COGO Optronics.
Andreas Umbach, the CEO and co-founder of u2t, said of the recent developments: “During our collaboration to acquire the assets of COGO Optronics GmbH and develop the InP modulator technology from the Fraunhofer Heinrich-Hertz-Institute (HHI), we realized that Finisar's technical strength, ability to cost effectively commercialize technology and global access to customers and markets would combine extremely well with our industry leading technology and design capabilities.”
“Furthermore, the acquisition provides a one-of-a-kind opportunity for our employees and innovative technologies to make a greater impact on the optical communication markets," he added.
Bubble-era spin out
Spun out of HHI back in 1998, towards the height of the telecommunications boom and subsequent bubble, u2t was founded by Umbach, Günter Unterbörsch and Dirk Trommer.
The company began life as a specialist provider of 40 Gbit/s receivers and tunable lasers – somewhat ahead of their time in terms of speed and functionality – and would soon be hit by the bursting of the telecoms bubble in the early 2000s.
However, those high-speed components have since become key parts of optical telecommunications networks. Since the deployment of 40 Gbit/s technology in the field, u²t has been able to grow its capacity, posting continuous revenue growth over the past decade.
The company also added modulator technology and design expertise through a 2009 acquisition, while maintaining its long term research and development partnership with HHI.
In 2008, u2t’s Umbach told optics.org: "The three founders were physicists at HHI who worked on indium phosphide technology and integrated photoreceivers, and we keep that close relationship.”
The Finisar acquisition will see those high-speed receiver, photodiode and modulator technologies combined with Finisar's narrow-linewidth tunable lasers, providing the Californian company with the full, vertically integrated supply of the optical components needed to offer modules for the 100 Gbit/s coherent metro and long-haul markets.
John Clark, Finisar's executive vice president for technology and global R&D, said in a statement: "Finisar is very excited about the near-term applications for the u2t technology and products for the 100G coherent telecom markets.”
“We are even more excited about the potential to use this technology to help drive data rates higher than 100 Gb/s and form factors smaller than the CFP2 module and enabling new market applications in both telecom and datacom.”
The acquisition comes shortly after Finisar posted another quarterly sales record of nearly $291 million, and the company's executive chairman Jerry Rawls has confidently predicted that revenues will surpass $1 billion for the first time in the current fiscal year.