SAN JOSE, CA - Back in 1999, when JDSU was formed through a merger between Uniphase Corporation and JDS FITEL, the market for optical telecom technologies was just beginning to heat up. By early 2001, the company had made it clear that its sights were set firmly on the telecom market, with more than ten strategic acquisitions, including Optical Coating Laboratory, E-TEK Dynamics, and SDL.
Now JDSU is once again turning its attention to M&As, but this time in the commercial sector. In mid-March the company announced a definitive agreement to acquire Lightwave Electronics Corporation (Mountain View, CA), a leading provider of solid-state lasers for materials processing, semiconductor fabrication, and biotech, for $65 million in cash. The merger is part of JDSU’s strategy to expand its line of solid-state lasers and broaden its customer base in commercial-laser markets.
“This acquisition reinforces our commitment to the OEM laser business and is in line with our strategy to invest in profitable, growing markets,” said Hoss Christensen, vice president of JDS Uniphase’s Lasers, Optics and Display Product Group. “Lightwave brings outstanding technical capabilities, complementary product lines, and a track record of profitability and strong execution-they will be a great addition to the JDS Uniphase team.”
JDSU’s current laser offering includes laser diodes, low-power solid-state lasers, high-power fiber lasers, and argon-ion and helium-neon gas lasers. With this acquisition, JDSU significantly strengthens its portfolio in the higher-growth solid-state laser markets and expands its presence with materials processing, semiconductor, and biotechnology customers for applications such as PC board via-hole drilling, wafer singulation for solar cells and LEDs, wafer inspection and alignment, memory repair, and ultraviolet flow cytometry and confocal microscopy.
“JDSU has been engaging in commercial lasers for a number of years with a portfolio that is focused mostly on our low-power solid-state green and gas-laser legacy,” said Enzo Signore, director of corporate marketing at JDSU. “But we wanted to capitalize on growing opportunities in the semiconductor, biotech, and industrial markets, and Lightwave has a very strong presence there.”
In fact, JDSU-which separates its businesses into three markets: communications, consumer, and commercial/defense-sees the commercial laser market as a strong potential growth area, especially with the addition of Lightwave’s solid-state lasers. JDSU currently generates 50%-60% of revenues from its communications business, but the balance comes from the commercial and consumer market-an area that the company has a strong legacy in and wants to expand on, according to Signore.
“Our core competencies are in the commercial sector and we plan to invest in this more in the future,” he said. “One of our key assets today is the strong synergy between our telecom products and our commercial products, such as coated optics. Over time, we expect to see this expand, such as bringing the high reliability of our telecom packages into our commercial products.”
The company is also expanding and accelerating its migration from gas-based lasers to solid state, another reason for the Lightwave acquisition. In fact, over the next few months, customers and investors can expect to see many things coming from JDSU in terms of transforming the company into a company that addresses multiple markets beyond telecom, according to Signore.
“In general, we are blessed with very strong financial position, especially in terms of cash, and with a strong technology base, which are major assets that we plan to use over time to expand our portfolio in key growth areas,” he said.