SiliconBeat

Two local optical components rivals — Bookham of San Jose and Avanex of Fremont — announced today they have reached an agreement to merge  into a single company, name yet to be determined, and subject to the approval of their respective shareholders.

Avanex shareholders will receive about 5.4 shares of Bookham for each share of Avanex in a an all-stock transaction that valued the deal at $35.4 million as of the close of markets Monday, when Avanex shares closed at $1.30 and Bookham shares closed at 40 cents each.

At those prices, each share of Avanex would get Bookham shares worth about $2.17. Traders initially seemed to express some skepticism about the deal value, pushing up the price of Avanex about 30 percent to $1.70 while Bookham shares were down fractionally.

We posted about Avanex back in August when, a week after reverse splitting its shares so that stockholders were given one share in exchange for every 15 they already owned, Avanex approved new restricted stock grants good for tens of thousands of Avanex shares to various executive, some of which were part of an “employee retention program”.

The resulting company will be headed by Bookham’s chief executive, Alain Couder, who will head its board of directors, which is to be made up of three directors selected by each company.

Avanex CEO Giovanni Barbarossa will stay on as a consultant and serve on the board. Bookham’s chief operating officer, Jim Haynes, and chief financial officer, Jerry Turin, will play those same roles at the new company.

As for the rank and file, all bets appear to be off. In September, Avanex said it was laying off 47 employees, or about 8 percent of its staff. An employee Q&A document about the deal, while upbeat in tone, nevertheless was mostly non-committal about maintaining jobs. Some examples:

Q:     What will happen to the Bookham and Avanex staff?

A:     With a deal of this nature it is likely that there will be some headcount reductions, however at this stage, numbers, locations, and functions will not be known until after the deal has closed.

Q:     What can I do in the next few months to best position myself for a job with the new company? What roles/characteristics will be considered as valuable?

A:     The most important thing we can all do is to stay focused on executing our respective goals and objectives. This will not only ensure the health of the companies as they prepare to merge but will allow each of us to demonstrate our personal ability to contribute to the new company’s success.

Bottom line:  look busy, folks!