California-based optics technology company Lumentum has agreed to acquire optical components company Oclaro for about $1.8 billion in a cash and stock deal.

Lumentum, is essentially a telecommunications equipment company, that manufactures optical and photonic products for optical networking and commercial laser customers across the world.

Lumentum acquisition of Oclaro is expected to help the former to widen its laser offerings portfolio, strengthen its research and development capabilities and also in giving it an edge over competitors in a rapidly growing market for 3D sensing technology.

Following the merger of Lumentum and Oclaro, shareholders of the optical components company will hold a stake of around 16% in the enlarged company.

Lumentum acquisition of Oclaro is likely to create more than $60 million in annual run-rate synergies in 12 to 24 months of the closing of the transaction.

Commenting on Lumentum acquisition of Oclaro, Alan Lowe – President and CEO of Lumentum, said: “Joining forces with Oclaro strengthens our product portfolio, broadens our revenue mix, and positions us strongly for the future needs of our customers.  Oclaro brings its leading Indium Phosphide laser and Photonic Integrated Circuit and coherent component and module capabilities to Lumentum.”

Alan Lowe also said that the enlarged company will see faster innovation and accelerated product development, thereby benefiting its customers.

Greg Dougherty – CEO of Oclaro, commenting on the Lumentum acquisition of Oclaro, said that the combined company will be a much stronger player in fiber optic components and also for modules for high-speed communications and a leading provider of 3D sensing technology.

The Oclaro CEO further said: “This is a fantastic combination for all of our stakeholders, including stockholders, employees, customers and partners.

“I am extremely proud of what the Oclaro team has accomplished over the last five years. We have enjoyed tremendous success and this combination will create even more exciting opportunities for the team.”

Depending upon approval by the shareholders of Oclaro, US and Chinese antitrust regulators and meeting of other customary closing conditions, the Lumentum acquisition of Oclaro is anticipated to be closed in the second half of this year.

  California, Lumentum, Oclaro, Optical components company, Optics technology company, Telecommunications equipment company, USA