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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (1182)	10/4/1999 7:52:00 PM
From: Kent Rattey	Read Replies (5) \| Respond to of 24042

<but analysts say they are still waiting for the "big one." > marketwatch.newsalert.com JDS Uniphase plans $400 million purchase Reuters Story - October 04, 1999 14:49 (All figures in U.S. dollars unless indicated) By Susan Taylor OTTAWA, Oct 4 (Reuters) - Following months of acquisition rumours, fiber-optic equipment developer JDS Uniphase Corp. has struck a $400-million deal to buy Trenton, New Jersey-based EPITAXX Inc., but analysts say they are still waiting for the "big one." Under the agreement announced on Monday morning, JDS said it expects to close the all-stock purchase by November. JDS common shares will go primarily to Nippon Sheet Glass Co. Ltd. , which owns more than 50 percent of EPITAXX and is also a supplier to JDS. Markets echoed analyst approval of the deal, the first major purchase from JDS, a product of the June 30 merger of San Jose, Calif.-based Uniphase Corp. and Ottawa-area based firm JDS FITEL Inc. On the Toronto Stock Exchange, the issue gained C$6.60 to trade at C$176.60 on Monday afternoon, while on the Nasdaq it rose $5- 1/4 to $120- 1/2. JDS Uniphase, which develops gear to help boost the capacity and performance of fiber-optic networks, will expand its arsenal of so-called active components with the purchase. EPITAXX, which expects fiscal 2000 sales of more than $40 million, develops optical detectors and receivers for fiber-optic and cable television networks. Receivers convert optical signals to electrical signals at the end of the network, so data being transported can be deciphered. Detectors are used to monitor the power and output of wavelengths, which carry the data on networks. "This is not the big one," said Emil Savov, analyst at Goepel McDermid Inc. in Vancouver who likes the deal anyway. Sales from EPITAXX, which has 350 staff, account for just 5 percent of JDS revenue. "Deals, in general, are expected from these guys," said James Kedersha, analyst at SG Cowen & Co. of JDS. "This is strategically a good move -- financially don't change any numbers." The deal is considered a strong strategic move. "There's a limited number of acquirers - there's JDS Uniphase, there's SDL Inc. , and E-Tek Dynamics Inc. ," said Patrick Houghton, analyst at Sutro & Co. in San Francisco. "The buzz out there was that EPITAXX was going to get acquired by SDL, so I think that JDS scored a good coup." The acquisition opens new, growing markets for high-sensitivity and high-speed gear to JDS. There are strong expectations for new 10 Gigabit-per-second receivers, which will likely be released in the first or second quarter. "They are filling a hole that is a high-growth segment," said Kedersha. "They had other products relating to it and needed to fill that out." Further details of the acquisition will be supplied when JDS reports its first-quarter results October 28. Consolidated results will begin when the deal closes. "It is an important addition," said JDS Chief Executive Kevin Kalkhoven during a conference call on Monday. "This is definitely a technology that has almost zero overlap... with anything else that we do -- and yet has a significant marketplace both inside and outside the company." Despite the purchase plan, JDS is still considered to be in acquisition mode. Analysts point out the firm used stock for the deal, rather than a war chest recently padded to more than $800 million with the sale of 10 million common shares. Long-standing speculation has JDS considering a fiber-optics division of Nortel Networks Corp. . One market watcher suggests that Waltham, Oak Industries Inc.'s Lasteron Inc. division, which would supply JDS which much-needed packaging capability for the devices housing laser chips. ($1=$1.47 Canadian)