SDL Aquisition (from Marketwatch)
SDL, Inc. Announces the Agreement to Acquire Photonic Integration Research, Inc. (PIRI), Leader in Planar
Waveguide Technology SDL Expands Product Portfolio with Entree to the High Growth Passives Market
WEDNESDAY, MAY 10, 2000 4:30:00 PM EST
SAN JOSE, Calif., May 10, 2000 /PRNewswire via COMTEX/ -- SDL, Inc. (Nasdaq:SDLI) announced today the
signing of a definitive acquisition agreement with the shareholders of Photonic Integration Research, Inc. (PIRI) valued
at $1.8 billion. PIRI, a privately held company located in Columbus, Ohio, is a leading manufacturer of arrayed
waveguide gratings (AWGs) that enable the routing of individual wavelength channels in fiber optic systems. These
products are used in optical multiplexing (mux) and demultiplexing (demux) applications for dense wavelength division
multiplexed (DWDM) fiber optic systems. The acquisition expands SDL's traditional role as a leader in active
components in fiber optic systems to that of a leader in advanced passive components. Further, the acquisition of
PIRI responds to the needs of SDL's customers going forward, by adding a critical silicon wafer based optical
integration technology which is expected to improve performance and lower costs in next generation DWDM systems.
The acquisition agreement provides for a $31.25 million cash payment and the issuance of approximately 10.2 million
shares of SDL, Inc. stock, based on the May 9, 2000 SDL closing stock price, in exchange for all of the stock of PIRI;
the exact number of shares will not be determined until closing. Completion of the transaction is subject to customary
closing conditions, including government and regulatory approval, and is expected to close by the end of the second
quarter. The transaction, excluding acquisition-related charges and amortization of intangible assets, is expected to
be accretive from the date of closing.
PIRI will continue to operate as a wholly owned subsidiary of SDL, Inc. In the quarter ended March 31, 2000, PIRI
achieved revenues in excess of $20 million and currently has 133 employees. Dr. Tadashi Miyashita, President of
PIRI, is expected to continue with SDL as the General Manager of the SDL subsidiary and will report to Greg
Dougherty, chief operating officer of SDL.
Donald R. Scifres, CEO and chairman of SDL, Inc. stated, "We believe PIRI is the established leader in the rapidly
growing market for AWG devices. As the channel count in DWDM fiber optic systems continues to increase towards
several hundred DWDM channels and as the channel spacing continues to decrease towards 100 and 50 GHz, AWG
products are expected to become the preferred technology over dielectric filter based wavelength mux and demux
products for advanced systems. As a result of the trend towards higher channel count systems, RHK, an industry
consulting firm, has estimated that AWG products will be a $1.2 billion market in 2003, with a CAGR of approximately
60 percent. We are pleased to be able to acquire PIRI at the beginning of a cycle with high projected market growth."
Scifres continued, "SDL is also a strong believer in optical integration technologies. The power of integrated circuit
style manufacturing processes utilized in the silica waveguide technology available at PIRI is crucial for next
generation product development. Going forward, we expect to integrate more advanced devices such as variable
optical attenuators, optical switches and optical add/drop multiplexers with the AWG products. This optical integration
is expected to improve product performance while lowering manufacturing costs, thereby providing the best value for
our customers."
Dr. Miyashita added, "By combining with SDL, we are teaming with a market leader which we believe will help us to
expand our manufacturing and customer base. SDL has also maintained a core group of scientists in the field of silica
waveguide technology which will further complement our technical expertise. We believe that with SDL as our partner,
we are well positioned in a high growth market. This is a win for our current customers, and our employees as well."
About PIRI
PIRI, formed in 1987 by NTT Corporation, Mitsubishi Corporation and Battelle, who together with Mitsubishi
International Corporation are the current shareholders, is the leading supplier of AWG products and silica waveguide
technology used in fiber optic mux/demux products. PIRI also offers a line of other products including thermo-optic
switches used in optical add/drop multiplexers, thermo-optic based variable optical attenuators (VOAs) used in gain
equalization, and optical splitters used for distribution of the optical signals. PIRI's products are applicable to the
undersea, long haul and metro markets.
About SDL
SDL's products power the transmission of data, voice and Internet information over fiber optic networks to meet the
needs of telecommunications, DWDM, cable television and satellite communications applications. They enable
customers to meet the bandwidth needs of increasing Internet, data, video and voice traffic by expanding their fiber
optic communications networks more quickly and efficiently than would be possible using conventional electronic and
optical technologies. SDL's optical products also serve a variety of non- communications applications, including
materials processing and printing. Additional information about SDL, Inc. is available on the Internet at www.sdli.com .
Statements in this press release which are not historical, including statements regarding SDL's or management's
intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements include statements regarding PIRI's position in the market for AWGs, SDL's position in the market for
active components in fiber optic systems and the impact of the acquisition on SDL's position in the market for
advanced passive components and the growth of that market, SDL's ability to use silicon wafer based optical
integration technology to improve performance and lower costs of products in next generation DWDM systems, the
expectation that the transaction, excluding acquisition-related charges and amortization of intangible assets, will be
accretive, the Company's belief that AWG products will become preferred over dielectric filter based wavelength
mux/demux products, the belief that the integrated circuit style manufacturing processes and optical integration
available at PIRI is crucial for next generation product development and will improve product performance and lower
manufacturing costs, the ability of the merged companies to successfully integrate and expand their product lines,
customer base and manufacturing capabilities, the ability of SDL's customers to expand their fiber optic
communications networks, the Company's expectation to retain PIRI's president, the belief that PIRI is well positioned
in a rapidly growing market, the ability to integrate more advanced optical devices with AWGs, the high projected
growth of the market for AWGs, and the expected closing date. It is important to note that the Company's actual
results could differ materially from those in any such forward-looking statements. Factors that could cause actual
results to differ materially include delay or failure to complete the transaction or successfully integrate the acquired
business, an inability to retain PIRI's president or other key personnel, risks related to uncertainties in or failure to
meet customer product specifications and market requirements, an inability to expand the company's product lines
and customer base, the possibility of emerging competing technologies and the risk factors listed from time to time in
the Company's SEC reports including but not limited to, the annual report on Form 10-K for the year ended December
31, 1999.
SOURCE SDL, Inc.
(C) 2000 PR Newswire. All rights reserved.
prnewswire.com
CONTACT: Donald R. Scifres, Chairman and CEO, or Michael L. Foster, VP
Finance and CFO, both of SDL, Inc., 408-943-9411, or General, Lisa Horn
Chainey or Marcia Nakamura, Investors, Susan Katz, or Media, Chris Wood, all
of The Financial Relations Board, 415-986-1591
KEYWORD: California
INDUSTRY KEYWORD: TLS
MLM
CPR
SUBJECT CODE: TNM
URL: sdli.com |
