From:
Diana Hayden <diana@mrv.com>
To:
"John LoBianco Jr."
Hi John:
As stated in the article, we are seriously considering this option. At
this point, I cannot disclose further information.
Best regards.
At 06:10 AM 6/23/99 -0700, you wrote:
>
>
>Hi Diana,
>
>Can you confirm this information for me?
>Would the company retain some control of the Optical Spin 0ff?
>I have a lot of questions and would really appreciate any
>information you could provide.
>
>Thank You,
>
>John LoBianco
>
>
>June 14, 1999 VOL. II, NO. 24
>
> CALIFORNIA NETWORKER EYES
> SALE OF COMPONENTS DIVISION.
> —Jesse Emspak
>
> MRV Communications, a Chatsworth,
> Calif.-based maker of networking equipment, is
> considering selling off its optical components
> division via an initial public offering, a move it
> believes could bring in US$600 millionUS$1
> billion and prop up its stock price. Noam
> Lotan, ceo, said the spinoff would narrow
> MRV's focus to data networking and wireless
> technologies. No banks have been chosen yet
> to help structure the sale. Lotan said MRV has
> had informal discussions with several banks
> but is open to pitches from others. The
> company is looking for a firm that can provide
> aftermarket support. “We want a firm that will
> be with us for a while,” he said. MRV's stock
> was trading at US$10 7/8 last Wednesday,
> down from its 52-week high of US$24. Lotan
> noted that the stock of other companies have
> risen following similar sales of non-core
> assets.
>
> Chester White, senior v.p. at L.H. Friend,
> Weinress, Frankson and Presson, an Irvine,
> Calif.-based investment bank, said MRV could
> sell the division for 10 times revenue. He noted
> that other companies in the optical networking
> industry such as E-Tek Dynamics Inc. are
> trading at even higher multiples. White noted
> the optical components division contributed
> about US$60 million in revenues to MRV 1998,
> and US$30 million in 1997. “It's a good growth
> story,” he said.
>
> Vivek N. J. Rao, senior v.p. of research at
> Gruntal & Co., said the company would be
> wise to keep the division. Rao is not convinced
> MRV could get more than three times revenue
> at best. “Because the stock is in the dumps
> they get a lot of grief from investors,” he said,
> “but what makes MRV tick is they have it
> (their optical components and switching
> businesses) together. Just because investors
> say it's a good idea doesn't mean you should
> do it.” If anything, keeping the optical
> components side of the company would serve
> MRV better in the long run because it is
> something that differentiates them from other
> companies in an otherwise crowded market,
> he said.
>
> Lotan hopes to sell the division at about 10
> times revenues. MRV's total revenues for 1998
> was US$264 million. He noted that many
> network hardware companies such as
> Redback Networks and Copper Mountain
> Networks have done well in public markets.
> MRV has invested in seed capital in other
> equipment start-ups, such as Charlotte's Web
> Networks. If companies like Charlotte's Web
> are successful in attracting other investors it
> would bode well for the sale of MRV's optical
> components division, he said.
>
Diana L. Hayden
MRV Communications, Inc.
8943 Fullbright Avenue
Chatsworth, CA 91311
818/886-6782
fax: 818/773-0906
mrv.com
|
