Alcatel Optronics to Acquire Kymata Ltd, a Leader in Next-Generation
DWDM Integrated Optical Components
Transaction strengthens Alcatel Optronics' position as a forerunner in the integration of
active and passive optical network devices
Paris, France and Livingston, Scotland - July 30, 2001 - Alcatel Optronics (Paris: CGO
and NASDAQ: ALAO), a world leader in optoelectronic components for telecommunications
systems, today announced it agreed to acquire privately held Kymata Ltd. Kymata is a key
player in mastering planar technology for high-end passive optical components,
representing the majority of the fast growing Dense Wavelength Division Multiplexing
(DWDM) market.
Under the terms of the agreement, 9.0 million Alcatel Class O shares and 2.2 million Alcatel
Class A shares will be exchanged for all outstanding shares of Kymata. Based on the
closing price in Paris on July 27, 2001, the transaction has an implied value of Euro 134
million.
Kymata produces Arrayed Waveguide Gratings (AWGs) multiplexer/demultiplexers, the first
commercially available devices using planar processes. AWG is considered to be one of
the leading technologies for the metropolitan optical network market, one of the fastest
growing markets in the telecommunication industry and a strategic target for Alcatel
Optronics. This acquisition also confirms Alcatel Optronics' strategy to be a major player in
the integration of active and passive optical components by strengthening its planar
waveguide expertise as well as its passive component product lines. Alcatel Optronics is a
recognized leader in active optical components.
"Kymata is a perfect match with Alcatel Optronics and will allow us to gain at least two
years in time-to-market for planar products. This acquisition is a crucial step in the
implementation of our strategy of active/passive integration, which we consider to be key
to the future. Their high-end passive components complement our own high-end active
component portfolio," said Jean-Christophe Giroux, CEO of Alcatel Optronics. "We have
identified significant synergies across the board, particularly in our marketing, sales and
development efforts. In addition, I am pleased to have been able to use our stock as an
acquisition currency in today's volatile market environment."
'"We are very pleased to become part of the Alcatel Optronics family," said Mike Hickey,
CEO of Kymata. "The deal is a win-win for Kymata, our people and for Scotland. It provides
our business with the resources and scale needed to achieve market leadership in a sector
that is increasingly competitive. It provides our employees with outstanding career
opportunities. And it provides Scotland with a world class research, development and
manufacturing facility that strengthens its standing as a leading center in the global
optoelectronic market. We believe our technology is at the leading edge of next generation
optical components and look forward to pooling our R&D resources with Alcatel Optronics
to better and more quickly meet the market demand for cost efficient and innovative
solutions."
The transaction is subject to various closing conditions and is expected to close by end of
August.
Notes to editors
Planar technology
Planar technology is based on creating optical waveguides on substrates. One strong
advantage of planar waveguide technology is that it can be manufactured using similar
processes as those used for semiconductor manufacturing. This leads to highly
reproducible performance, resulting in greater manufacturing yields and
cost-effectiveness. In addition, planar waveguide technology enables passive devices to
be integrated with active devices, such as lasers and detectors. Initially, planar devices
can be used to create DWDM AWG multiplexers/demultiplexers, variable optical attenuators,
true optical switches, and optical add/drop multiplexers -- all on one chip. Eventually as
processes for combining hybrid elements develop, it may be possible to have active and
passive solutions on one device.
Arrayed Waveguide Gratings technology
AWGs are used for managing DWDM signals. A multiplexer is used to combine all the
wavelengths at the beginning of a DWDM route onto one fiber. A demultiplexer is used at
the other end to separate out the various wavelengths. Basically each of the arms (or
waves) of the waveguide has a slightly different length and this creates interference
patterns that allow the separation of the wavelengths at the other end.
About Alcatel Optronics
Alcatel Optronics designs, manufactures and sells high performance optical components,
modules and integrated sub-systems for use in terrestrial and submarine optical
telecommunications networks. Operating state-of-the-art manufacturing plants in North
America and Europe, Alcatel Optronics is a leading supplier of DWDM lasers,
photodetectors, optical amplifiers, high-speed interface modules and key passive devices
such as AWGs and Fiber Bragg Grating filters. It also has experience in integrating active
and passive components and modules into sub-systems. The Optronics Division is part of
Alcatel's Optics Group which comprises Alcatel's world-leading activities in optical
networking, including submarine and terrestrial transmission systems, fiber optics and
optical components.
About Alcatel
Alcatel builds next generation networks, delivering integrated end-to-end voice and data
networking solutions to established and new carriers, as well as enterprises and
consumers worldwide. With sales of EURO 31 billion in 2000 and 110,000 employees,
Alcatel operates in more than 130 countries.
About Kymata
Founded in 1998, Kymata Ltd. is a technology leader providing next-generation planar and
microelectromechanical systems-based integrated optical components for the networking
industry. The company is dedicated to designing, fabricating, packaging and automated
testing of components and sub-system level solutions to meet the high volume challenges
facing the DWDM communications industry. Kymata Ltd. is one of the forerunners leading
the race to the integration of active and passive devices onto silicon substrates. Based in
Livingston, Scotland, the company employs around 407 persons (including 95 highly skilled
R&D people) split over its six North American and European locations. For more information,
kymata.com
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This
press release contains forward-looking statements relating to (i) Alcatel Optronics'
performance in future periods, (ii) Alcatel Optronics' ability to remain competitive and a
leader in the industry in which it operates and its future growth and (iii) the telecom industry
generally and the lines of business of Alcatel Optronics and Kymata, specifically.
Statements related to the future performance involve certain assumptions, risks and
uncertainties, many of which are beyond the control of Alcatel Optronics or Kymata, and
include, amongst others, applicable regulatory approvals, growth and customer spending
patterns in the telecommunications market, foreign and domestic product and price
competition, cost effectiveness, changes in governmental regulations, general economic
and market conditions in various geographic areas, interest rates and the availability of
capital. Although Alcatel Optronics and Kymata believe their respective expectations
reflected in any such forward-looking statements are based on reasonable assumptions,
they can give no assurance that those expectations will be achieved; actual results could
differ materially from the above as a result of these or other factors. Unfavorable changes
in the above or other factors listed under "Risk Factors" from time to time in Alcatel's SEC
reports, could materially affect Alcatel Optronics.
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