Oclaro, Inc. (NASDAQ:OCLR) has kicked off an equity fundraiser. The company is offering 13 million newly issued shares of its common stock to the public. Oclaro has tapped underwriters to help with the offering and has granted those underwriters to purchase up to 1.95 million additional shares to cover over-allotment.

The company did not disclose the pricing of its newly-issued shares, but promised that it will be issuing more information regarding the offering soon.

What’s the money for?

Oclaro said that the net proceeds from the equity offering will be used for general corporate purposes such as acquisitions, working capital and capital expenditure. As for acquisition, the company said that it has not committed to acquire any specific asset.

Oclaro’s equity fundraiser comes shortly after the company eliminated $65 million of debt, thus reducing its interest expense burden.

Oclaro’s fundraiser also follows on the heels of its partnership with Mellanox Technologies, Ltd. (NASDAQ:MLNX). The companies said that the partnership will enable them to integrate laser technology into their next-generation servers and other networking gears. Investors were initially bidding up the shares of Oclaro on the partnership news, but the trend reversed immediately when the company said it was planning to dilute its stock.

The partnership agreement that Oclaro and Mellanox have drawn up will lead to building servers, network switches and storage appliances that can link easily between transceivers of different wavelengths.

Price target raised at Needham

The analysts at Needham believe that Oclaro is moving in the right direction. As such, the analysts have a STRONG BUY rating on the stock with a price target of $10. They raised the price target from $8.

Among other things, the analysts said that they are impressed with the strong and improving demand for Oclaro’s products.

Oclaro was recently awarded the 2016 Excellence in Emerging Technology Award by Cisco Systems Inc. (NASDAQ:CSCO).