The deal will put JDSU squarely among suppliers of Fibre Channel interface converters for leading equipment makers. "[T]he extension of our product breadth into SAN and LAN networks broadens our addressable market to include customers that serve enterprise networks," says JDSU CEO Jozef Straus in a prepared statement. "Examples of new customers include Compaq, IBM, Sun, Dell, HP, Brocade, and Extreme."
What exactly is JDSU buying, and why?
JDSU is buying a unit of IBM's microelectronics business that makes transceivers and interface converters for storage area network (SAN) and gigabit Ethernet local area network (LAN) equipment, such as switches.
JDSU will pay $100 million in cash for the business, and the rest in stock. Another $85 million is payable at the start of 2003 if the business meets certain financial goals after JDSU's takeover. In a prepared statement, JDSU says it expects to record $300 million in goodwill for the purchase, "minus the in-process charge that will be based on an appraisal that will begin shortly."