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ADC Scores a Coup on Tunable Lasers

Light Reading
News Analysis
Light Reading
5/5/2000

ADC Telecommunications, Inc http://www.adc.com today announced a couple of acquisitions that promise to give the company a strong position in tunable lasers, a market that is expected to grow substantially in the coming years.

Under one of deals, ADC will acquire Altitun AB http://www.altitun.com, a Swedish startup making tunable lasers for $872 million in stock. Under the other deal, it will buy Ibsen Micro Structures http://www.ibsen.dk, a Danish manufacturer of phase masks - used in the manufacture of tunable lasers - for $80 million.

ADC looks as though it's got quite a bargain. It's paying a lot less for Altitun than Nortel Networks Inc. http://www.nortelnetworks.com paid for another tunable laser startup, Coretek Inc. http://www.coretekinc.com in March (see Nortel Gambles $1.43 Billion On Tunable Lasers).

Both Altitun and Coretek are developing next next generation tunable lasers - ones that can be tuned over a wide range of frequencies - but Altitun is shipping its lasers while Coretek is still in the development phase. Moreover, the Vertical Cavity Surface Emitting Laser (VCSEL) lasers being developed by Coretek are said to be particularly difficult to manufacture.

Acquiring Ibsen also looks like quite a coup. Ibsen claims that it's one of only two phase mask makers in the world.

Investors responded positively to ADC's acquisition today. The company's share price went up from around $57 to $63, while the Nasdaq Composite index remained relatively flat.

By Peter Heywood, international editor, Light Reading http://www.lightreading.com

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