May 18, 2004 San Jose, CA--JDS Uniphase announced the acquisition of E2O Communications. As a result of the acquisition, JDS Uniphase expects to strengthen its position in the optical data communications market with an expanded customer base and important new technologies, while gaining greater operational efficiencies.
Under the terms of the agreement, JDS Uniphase acquired E2O Communications for approximately $60 million in cash. Founded in 1998 and headquartered in Calabasas, CA, E2O develops and manufactures optical transceivers to support Fast Ethernet, Gigabit Ethernet, 10 Gigabit Ethernet, 1X-4X Fibre Channel, 10 Gigabit Fibre Channel, ESCON, ATM and SONET. E2O is a supplier to major datacom customers, including seven that are additive to JDS Uniphase's customer base. E2O revenue in recent quarters has been in excess of $5 million.
"E2O has been an excellent supplier to us and we now look forward to continuing and expanding that relationship with JDS Uniphase," said Bob Finley, vice president of manufacturing for McDATA Corporation. "We have already met with members of the JDS Uniphase integration team, and have taken the first steps in planning for the acquisition."
The data communications market has been one of the fastest growing areas in optical communications. Ethernet and Fibre Channel unit sales are expected to increase from about 10 million units in 2003 to about 14 million units in 2005, according to the 2003 forecast of optical communication industry research firm RHK, Inc. The acquisition of E2O provides a complementary customer set to JDS Uniphase, enhancing its position in this important market.
"JDS Uniphase is committed to leadership in the data communications market," said Don Bossi, president of JDS Uniphase's Transmission Products Group. "The acquisition of E2O provides JDS Uniphase with additional expertise in low cost manufacturing, greater economy of scale, and other infrastructure cost synergies that we believe will lower costs now and for the future. We believe these synergies and the strong cultural fit between the two companies make this a lower-risk path to expand our role in one of our fastest growing markets."
H.C. Lee, Ph. D., president and chief executive officer of E2O, will join JDS Uniphase as vice president of the combined datacom business unit, reporting to Don Bossi. In addition to key leadership and customer account managers, E2O also brings strong research and development capabilities and leading technology, such as their long wavelength vertical-cavity surface-emitting laser (VCSEL), which offers a breakthrough in enabling 10-Gbit/sec enterprise and other applications. E2O successfully demonstrated their long wave VCSEL at the Optical Fiber and Communication (OFC) Conference in February.