Viavi Solutions, Lumentum begin life as JDSU is no more

JDSU officially split into Viavi Solutions (NASDAQ:VIAV) and Lumentum Holdings Inc. (NASDAQ:LITE) August 1. Their respective stocks will begin trading tomorrow.

Viavi comprises JDSU's test and measurement as well as its Optical Security and Performance (OSP) operations, under the leadership of President and CEO Thomas Waechter, who held the same positions at JDSU. Lumentum's core is the former Communications and Commercial Optical Products (CCOP) business unit. CCOP head Alan Lowe is that company's president and CEO.

The two companies will continue to be headquartered at the former JDSU's campus in Milpitas, CA, with Lumentum occupying two of the campus's three main buildings. Viavi has proven the more aggressive of the two in terms of media outreach. (Lumentum begins its existence in a quiet period before announcing earnings later this month.) Waechter said in an interview last week that Viavi will look toward opportunities in the evolution of carrier and data center/enterprise networks toward software-defined networking (SDN) and network functions virtualization (NFV), particularly in enabling network operators to monetize the data they collect as part of their monitoring operations (see "Viavi Solutions to aid network evolution, monetization").

JDSU announced the division in September 2014 (see "JDSU to split in two"). The split ends JDSU's reign as one of the top companies in optical communications technology and test and measurement. The company was extremely aggressive in mergers and acquisitions during the bubble era. It formed via the merger of JDS Fitel and Uniphase Corporation in 1999, and embarked on several subsequent transactions, notably the acquisitions of SDL, Optical Coating Labs, E-TEK Dynamics, and E20 Communications, among others.

The company jumped into the test and measurement space with the acquisition of Acterna in 2005 (see "JDS Uniphase jumps into triple-play testing with Acterna acquisition").

While the company enjoyed success operating in several markets (particularly as the profits from the test and measurement activities helped offset challenges in the optical communications segment during the post-bubble years), the company has spent the last three to five years refocusing each of the three main businesses (including OSP) to get into a position to separate, Waechter said. "We've evolved those three businesses. And when we got to this point, we felt we could be more successful separating the business into two."

The financial community has speculated that Lumentum may quickly become an acquisition target. Jerry Rawls, executive chairman at Finisar, fanned those flames this past March at OFC by stating that if Lumentum is for sale, he'd be interested in buying it (see the video interview).

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