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21 February 2007


Opnext closes $254m IPO

Optical communications module and component maker Opnext Inc of Eatontown, NJ, USA has closed its initial public offering on Nasdaq of 16,909,375 shares (27% of its stock) at a price of $15 per share ($254m, before underwriting discounts and commissions). Of this, the company offered 10,000,000 shares ($150m) and selling stockholders offered 6,909,375 shares. The IPO’s underwriters have the option to buy an additional 2,536,406 shares at the IPO price to cover over-allotments.

Founded in 2000 as a subsidiary of Hitachi Ltd, Opnext was spun-out of Hitachi’s fiber-optic components business in 2001 ( funded by the Clarity Group) . Opnext still works closely with Hitachi’s research laboratories under long-term contractual relationships to conduct research and commercialize products based on fundamental optical technology (particularly communications lasers). Following the IPO, Hitachi owns 45.7% of Opnext’s stock (or 43.9% if the underwriters’ over-allotment option is exercised in full).

Opnext says that, since 2001, it expanded its customer base, increased its design wins eight fold across its top ten customers, expanded its product lines and patent portfolio (314 awarded and 353 pending), and acquired and integrated two businesses. For Q4/2006, Opnext reported revenues of $61.7m (up 60% on $38.6m a year ago) and a net profit of $3.2m (compared to a loss of $4.1m a year ago). In January the firm announced the shipment of its 250,000th 10Gb/s transceiver.

Of the funds raised in the IPO, Opnext plans to use $25m for future capital expenditure, $25m for R&D (including the development of new products and enhancement of its existing products), and about $50m for the repayment of short-term loans. “We may also use a portion of the net proceeds for the acquisition of, or investment in, businesses, technologies or products that complement our existing business,” the firm adds.