The Lightwave Blog

Posted by Stephen Hardy

Alright, so I got off the phone with Jerry Rawls, chairman, president, and CEO of Finisar, and Eitan Gertel, chairman and CEO of Optium, about 15 minutes ago -- and I have a newsletter to put out. So here are few choice quotes about the merger announced today that I promise to come back and flesh out later.

First, the merger was Jerry's idea. "I was on a trip in Europe and I got an email from Jerry and we started from there," says Eitan.

Here's why Jerry called:

"One of the things about Optium was that they were in my view clearly the most attractive partner in this industry because their product lines were so complementary to us and because they were a profitable, successful company. And all of our customers, where we shared customers in common, our customers thought highly of Optium. And there are so many of the potential partners in our industry that you might try to acquire or merge with and either the customers didn't like them, the company was wounded, they weren't profitable, or you had this huge overlap in products that you would have to now rationalize -- or you would lose some of the business at customers because you were competitors, you were both qualified. And Optium was the one company in the industry where that didn't exist. So the combination for us was clearly the best in the industry."

Rawls admitted that he was shopping around. This isn't surprising, given what he told me just before OFC/NFOEC about his desire to expand Finisar's offerings in the telecom space.

From Eitan's view, the deal is all about scale. "Optium was running at a pretty good growth rate, but at some point I looked at this industry and I said that the industry was too fragmented -- there's no critical mass. If we keep growing, even at 30% per year, it's still going to take a few years to get to a critical mass to start making a difference in this industry. So Finisar for us was the perfect company to do this deal with, because there's no duplication of products."

More to come in a little bit...

Labels: Finisar, Optium