Here is another article on the acquisition which fleshes out a few points.
yahoo.cnet.com
Of interest from the article:
PIRI's shareholders, Nippon Telegraph & Telephone, Mitsubishi and Battelle Memorial Institute, hired Wit SoundView last year to sell the company.
The three companies will receive $1.4 billion in SDL shares, NTT and Mitsubishi said in a joint statement. PIRI is owned 49 percent by NTT, 41 percent by Mitsubishi, and the rest by Battelle. NTT will receive an additional $310 million in SDL shares as licensing fees.
Mitsubishi said it will post a 64 billion-yen ($587 million) capital gain from the sale.
The purchase gives SDL arrayed wave guides, chip-sized devices made of glass that combine the streams of different lasers. It puts the company into direct competition with the biggest maker of products to boost capacity, JDS Uniphase, whose devices are based on tiny filters.
"It's a lot easier and cheaper to make arrayed wave guides," said SDL chief executive Don Scifres.
Companies such as Alcatel use components from JDS Uniphase to add beams from different lasers to fiber-optic networks in a process known as wave-division multiplexing, or WDM. Each laser represents a channel in the network.
Scifres said WDM products based on filters sell for about $1,000 a channel, while arrayed wave guides sell for half as much. Phone-equipment makers are moving to systems with 160 channels this year from mostly 40 today.
Among the other makers of arrayed wave guide products are Lucent Technologies, the Hitachi Cable subsidiary of Hitachi and Bookham Technology.
Up for sale
SDL also looked at E-Tek Dynamics, a maker of filter-based WDM products that agreed in January to be acquired by JDS Uniphase. The company first offered to buy PIRI in February, Scifres said. PIRI will be SDL's biggest acquisition.
The purchase will add to SDL's earnings before acquisition costs are factored in, Scifres said. He said PIRI would have represented 20 percent of both SDL's sales and profit in the first quarter. SDL had net income of $14.2 million on first-quarter sales of $72.2 million.
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