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Bookham buys parts of Nortel’s HPOCs business

The rumors and speculation over who might buy Nortel’s optical components business have come to an end with the announcement that Bookham Technology is to take over some of the unit's assets
Bookham Technology of Abingdon, UK, has purchased some of the assets of Nortel Networks’ high performance optical components (HPOCs) business in a stock based deal. Bookham will issue Nortel with 61 million new shares, worth $112 million, effectively leaving Nortel with just under 30% of the issued Bookham stock. Bookham will also assume about $50 million worth of debt and pay Nortel $10 million in cash to cover restructuring costs that will result from the implementation of the deal.

The deal includes the sale of Nortel’s transmitter and receiver business in Paignton and Harlow in the UK and Ottawa, Canada and the pump laser and amplifiers business in Paignton, Zurich in Switzerland, and Poughkeepsie, NY. The transferred assets include patents, other intellectual property and trademarks. Approximately 1,000 Nortel employees will be transferred to Bookham.

In a repeat of the deal made with Marconi when Bookham took over the UK company’s optical components business, the transaction with Nortel also includes a three year supply agreement for minimum purchase by Nortel of approximately $120 million of Bookham s products for the first 18 months.

The transaction is expected to be completed by the end of 2002. The completion of the transaction is subject to customary regulatory approvals and a vote by Bookham’s shareholders. Under the UK Listing Rules, due to the size of Nortel’s business unit to be acquired relative to Bookham, the deal is classified as a reverse takeover and trading in Bookham’s shares have been suspended for one day until October 8.

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