Optical communications powerhouse JDS Uniphase is back on the acquisitions trail, paying $60 million in cash for E2O Communications Inc. The acquisition significantly expands its presence in the optical data communications market.
JDS said the acquisition expands its customer base, brings it important new technologies while allowing it to achieve greater operational efficiencies. Founded in 1998 and headquartered in Calabasas, Calif., E2O develops and manufactures optical transceivers to support Fast, Gigabit and 10-Gigabit Ethernet, 1X-4X and 10 Gigabit Fibre Channel, Escon, ATM and Sonet.
E2O supplies major data commuications customers, including seven that add to JDS Uniphase's customer base. E2O's revenues in recent quarters have been in excess of $5 million.
The data communications market 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 researhers RHK Inc.
Don Bossi, president of JDS Uniphase's Transmission Products Group, said: "The acquisition of E2O provides us 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, president and chief executive officer of E2O, will join JDS Uniphase as vice president of the combined datacom business unit, reporting to Bossi.