Bookham Inc., a provider of optical components, modules and subsystems in San Jose, Calif., has agreed to acquire Avalon Photonics. Based in Zurich, Switzerland, the latter company supplies single- and multimode vertical- cavity surface-emitting laser chips, arrays and subassemblies for sensing and data communications applications. Under the terms of the transaction, Bookham will exchange approximately 765,000 shares of its common stock valued at approximately $5.5 million on signing, and a potential additional 348,000 share earn-out based upon Avalon achieving certain revenue and production performance criteria over a two-year period. The deal was scheduled to be completed in March, subject to customary closing conditions.