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2 August 2007


Arasor set to acquire Alfalight and AOFR to bring laser and coupler components in-house

Integrated optical chip maker Arasor International Ltd of Mountain View, CA, USA is set to acquire Alfalight Inc of Madison, WI, USA, which designs and manufactures high-power diode lasers, and AOFR Pty Ltd of Canberra, Australia (a subsidiary of fiber manufacturer Verrillon Inc of North Grafton, MA, USA), which designs fused fiber components such as optical couplers (manufactured in Asia). The collective purchase price is US$63m.

Arasor was founded in 2000 and manufactures integrated optoelectronic chips, with operations in Guangzhou, Beijing and Shanghai in China, Sydney in Aust ralia, Bangalore in India, and Yokohama in Japan. The firm is aiming to establish itself as a solutions company serving system makers in optical network transport, wireless communications (‘radio over fiber’ wireless access systems) and emerging consumer optoelectronics applications (such as laser-based TV displays).

“With these acquisitions, Arasor has brought the critical laser element in-house, enabling improved profitability and control of future laser developments in Arasor’s emerging markets,” says chairman and CEO Dr Simon Cao. “We now control the three key elements common to all our products (optical chip, laser chip and coupler), and bring significant revenue opportunities to bear in addition to their existing US$20m per annum revenue streams [customers include Telstra, Avanex and Siemens],” he adds. Cao highlights the prospect of expanding Arasor’s product portfolio to include laser components for the telecom market.

Originally founded in 1998, Alfalight has received over USD$57m of venture funding, and substantial US government funding for R&D. Assets include an InGaAs laser chip fabrication plant. Alfalight’s Aluminum-Free Active region (ALFA) high-power diode lasers include integrated narrow-spectrum wavelength-stabilization technology (WST). Product lines include chip-on-carrier, Telcordia-qualified fiber-coupled single emitters, and integrated pump modules.

“The management team of Alfalight includes seasoned industry veterans from Motorola and Intel who bring semiconductor manufacturing management experience to our team,” says Cao. Alfalight’s CEO Mohan Warrior, continues to run the firm in Madison as a subsidiary of Arasor US Corp (after the transaction closes on or about 1 November). Prior to leading Alfalight’s over the last four years, he held senior leadership positions at Motorola Semiconductors (now Freescale). Warrior says that acquisition by Arasor brings growth prospects, particularly in the emerging Asian markets of China and India. “Arasor's unique optical chip technology will dramat ically enhance our proprietary laser capabilities to create a diverse range of differentiated telecom & consumer optical products,” he adds.

“This deal expands our customer base & product offering as we leverage our products into Alfalight’s existing sales channels in the US, and their products through our current customers & channels in China & India,” says Cao.

AOFR was established in 1984 to manufacture optical couplers for fiber lasers and, from 1988, wavelength division multiplexing (WDM) optical communications.

AOFR’s technology gives Arasor control over the critical light-delivery element common to all its products, coupling the light between its transmitters (wirelines and wireless) and from a laser TV’s source to its display. The firm’s products and customers complement Arasor's.

“With this acquisition from Verrillon Inc, we take control of the second critical element of light-delivery technology common to all our products, and broaden our customer base to include most of the tier-one telecom players in the US,” says Cao. “Likewise, we expect to leverage our China and India relationships to broaden AOFR’s customer base into those hyper-growth markets,” he adds. “AOFR also created a critical element of fiber lasers, which will become a critical piece of the access network where we operate our unique optically driven wireless systems,” he reckons.

“AOFR has been profitable for an extended period and supplies to the world’s top optical, defense and wireless companies,” adds Cao. “There is a natural synergy in this deal for both companies which should immediately result in an enhanced financial outcome.”

See related item:

Alfalight launches 808nm wavelength-stabilized lasers for wide-temperature-range systems