Highwave lines up Northlight acquisition
A French optical component and subsystem supplier is planning to acquire Northlight Optronics.
Highwave Optical Technologies, which is based in Lannion, Brittany, says that it has signed a memorandum of agreement with the Swedish operation's major shareholders in a deal expected to be worth €16 million.
Previously known as Ericsson's optoelectronics division, Northlight was set up in 2003 when the parent company decided to exit the flagging optical components sector. Along with two Swedish investment groups, Ericsson is one of the three major shareholders in Northlight.
Under the proposed takeover, the Northlight shareholders would receive a total of 26.7 million new shares in Highwave valued at €0.60 per share.
Highwave's chief operating officer, Sylvain Boj, said that Northlight had generated a revenue of around $2.3 million in the first nine months of 2004. And despite the Swedish company racking up a loss of $5.7 million during that time, Boj believes that cost-cutting measures already taken, such as some outsourced manufacturing activity (see related story), will drastically cut this figure.
Boj added that Northlight's expertise in active optical components would complement his company's existing knowledge in the passive device area. Northlight's strength in the US market is also expected to match well with Highwave's European and Asian focus.
Francois Leraillez, the French company's chief executive, said that if successful, the deal would double Highwave's addressable market at a time when the optical sector was showing "signs of significant recovery".
The terms of the proposed acquisition demand that Highwave's pending takeover of the French MMIC design house DA-LightCom receives shareholder approval.
