ADC to acquire Fiber Optic Network Solutions

July 25, 2005
July 25, 2005, Minneapolis, MN--ADC has agreed to acquire Fiber Optic Network Solutions (FONS), a manufacturer of high-performance passive optical components and fiber optic cable packaging, distribution and connectivity solutions. ADC will pay $172 million in cash for FONS, net of any FONS debt at the time of closing. The transaction is expected to close during the next 30 to 90 days.

July 25, 2005, Minneapolis, MN--ADC has agreed to acquire Fiber Optic Network Solutions (FONS; Marlboro, MA), a manufacturer of high-performance passive optical components and fiber optic cable packaging, distribution and connectivity solutions. ADC will pay $172 million in cash for FONS, net of any FONS debt at the time of closing. The transaction is expected to close during the next 30 to 90 days.

According to the companies, the deal is designed to further enhance and add scale to ADC's existing line of fiber-to-the-x (FTTX) solutions and to support ADC's long-term goal of being the leading global provider global network infrastructure solutions. A privately held company financed by two rounds of venture investing and owned by Oak Investment Partners, Morgenthaler Partners and its employees, FONS has approximately 60 employees worldwide and estimated 2005 sales of $95 million. In addition to its corporate headquarters in Marlboro, FONS has strategic partnerships and outsourcing relationships in Mexico, Japan, and China.

"FONS is a high-quality connectivity business that fits well with our strategy for capturing the strong growth potential of the FTTX market, which is in the early stages of its growth curve," said Robert Switz, president and CEO of ADC. "This acquisition more than doubles our FTTX outside plant business to greater than 10% of total ADC sales."

Based on industry analysts' estimates and ADC's own proprietary market research, ADC believes that the FTTX market's growth potential is significant around the world. This research indicates the following estimates:

* In the United States, FTTX networks are expected to pass more than 4.5 million homes by the end of 2005. It is estimated that by year-end 2008, FTTX networks will pass more than 29 million homes and that $1.5-$3.5 billion will be spent annually by telecommunications service providers during the next five years as FTTX networks are deployed in the United States.

* Internationally, FTTX networks are expected to pass more than 10 million homes by the end of 2005 and it is estimated that by year-end 2008 more than 60 million homes will be passed by FTTX networks.

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