Finisar to Acquire Honeywell VCSEL Optical Products Business
This is a nice acquisition at $75M/$36M or 2.1 time sales. Subtract the sales to FNSR and they got 75/27= 2.8 times sales. I especially like the fact they bought the VCSEL business with cash rather than shares. It tells me my FNSR shares (bought at $2.97 each) are more valuable than cash….
Disclaimer I hold this stock in my personal account and not my newsletter. I may change my position at any time and will not necessarily report this beforehand. Buy or sell at your own risk and don’t assume anything.
Kirk
as of 01/29/2004 9:38am FNSR FINISAR CORPORATION Last [Tick] 3.45[ + ]
Press Release Source: Finisar Corporation
Finisar to Acquire Honeywell VCSEL Optical Products Business
Monday January 26, 7:00 am ET
Acquisition Enhances Finisar's Position as a Leading Supplier of High-Speed Fiber Optic Datacom Products
SUNNYVALE, CA--(MARKET WIRE)--Jan 26, 2004 -- Finisar Corporation (NasdaqNM:FNSR - News) and Honeywell International Inc. (NYSE:HON - News) announced today that they have entered into a definitive agreement in which Finisar has agreed to acquire Honeywell's VCSEL Optical Products business, based in Richardson, Texas, for approximately $75 million in cash. The transaction is subject to applicable regulatory approvals and other customary closing conditions and is expected to close in the first calendar quarter of 2004. Following the completion of the acquisition, Finisar expects to continue to operate the business at the Richardson, Texas facility.
Honeywell's VCSEL Optical Products business manufactures vertical cavity surface emitting lasers (VCSELs), primarily used in high-speed fiber optic data communications and position sensing applications. VCSELs are cost-effective optical components that deliver coherent light with high efficiency and can be modulated at high speeds. Finisar provides fiber optic subsystems and network performance test systems that enable high-speed data communications for networking and storage applications.
"The VCSEL Optical Products business is a proven technology leader with excellent long-term potential and strong product position," said Roger Fradin, President of the Automation and Control Solutions (ACS) division of Honeywell. "This business has been considered non-core to Honeywell ACS's strategic focus of developing its sensing and control, fire and security, process solutions and building solutions businesses. Selling the unit represents a strategic win for the VCSEL business, Finisar, Honeywell, our joint customers and employees."
"We plan to continue the operation of this business as a worldwide supplier of VCSELs," said Jerry Rawls, Finisar's President and CEO. "This group has developed a reputation as an excellent supplier to the industry and we expect to continue that tradition. In addition, VCSELs are probably the single most important component in a short wavelength transceiver in terms of performance, reliability and cost. With short wavelength transceivers comprising a significant portion of our total unit volume, this acquisition will also help us to realize additional cost savings."
The VCSEL Optical Products business generated approximately $36 million in revenues during 2003, including approximately $9 million from components supplied to Finisar. Finisar expects the business to contribute approximately $25-$30 million in revenues during the first year of operation with a positive impact on gross margins and pretax earnings, excluding the impact of non-cash charges related to the acquisition.
Honeywell VCSEL Optical Products and Finisar have had a long-standing relationship dating back to 1996 when Honeywell introduced the first VCSEL component specifically targeted for fiber optic data communications. Finisar was one of the first customers to adopt this new technology which helped to enable the development of high-speed, highly reliable and cost-effective gigabit fiber optic transceivers for links spanning less than 300 meters. These products are typically used in Local Area Networks ("LAN") and Storage Area Networks ("SAN") applications.
ABOUT FINISAR
Finisar Corporation (NasdaqNM:FNSR - News) is a technology leader for fiber optic subsystems and network performance test systems. These products enable high-speed data communications for networking and storage applications over Gigabit Ethernet Local Area Networks (LANs), Fibre Channel Storage Area Networks (SANs), and Metropolitan Area Networks (MANs) using IP and SONET/SDH-based protocols. The Company's headquarters is in Sunnyvale, California, USA. www.finisar.com
ABOUT HONEYWELL
Honeywell International is a diversified technology and manufacturing leader based in Morris Township, N.J. With 2002 revenues of $23 billion, the company serves customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; specialty chemicals; fibers; and electronic and advanced materials. The company's shares are traded on the New York, London, Chicago and Pacific Stock Exchanges. Honeywell is one of the 30 stocks that comprise the Dow Jones Industrial Average; it is also a component of the Standard & Poor's 500 Index. For additional information, please visit www.honeywell.com. Honeywell's Automation and Control Solutions (ACS) group is a global leader in providing product and service solutions that improve efficiency and profitability, support regulatory compliance, and maintain safe, comfortable environments in homes, buildings and industry. For more information about Honeywell ACS access acs.honeywell.com. |
