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Optical/IP

Avanex Scores Major 'Coup'

Avanex Corp. (Nasdaq: AVNX) has plucked its new president from the ranks of its top rival, hiring Jo Major, head of JDS Uniphase Corp.'s (Nasdaq: JDSU; Toronto: JDU) components products group.

Major will take over as Avanex's president, while Walter Alessandrini will shed that role but remain chairman, the company announced yesterday. Major's first day at Avanex will be Aug. 18. His executive bio has already been removed from the JDSU Website.

Avanex "struck a coup" with the hiring, writes analyst John Harmon of Needham & Co. in a report issued this morning. Major ran the pump laser business of SDL Inc., the largest of JDSU's acquisitions during the bubble (for a nice bit of nostalgia, see JDSU/SDL: A Component Powerhouse). His pedigree includes a 15-year run at the "epicenter" of the optical components industry, Harmon writes.

The new hire is part of Avanex's ongoing work to stabilize itself after getting shipwrecked by the recession. After exceeding $200 per share in 2000, the company's stock price was falling in 2002 when executives proposed the acquisition of Oplink Communications Inc. (Nasdaq: OPLK) to restore the company to power. Oplink shareholders scotched the deal and, shortly afterwards, Avanex CEO Paul Engle departed, and Alessandrini came out of retirement to replace him (see Avanex (AVNX), Avanex and Oplink: Wedding's Off, and Avanex Gets New CEO).

Since then, Alessandrini launched Avanex's new makeover by acquiring the components divisions of Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Corning Inc. (NYSE: GLW) last year (see Avanex to Buy Alcatel, Corning Units and Avanex Deal Reshapes Sector). The addition of Major is a "necessary increase in Avanex's management depth in order to take it to the next level," Harmon writes.

Major's hiring marks the second time a JDSU executive has defected to Avanex. The first was Syrus Madavi, who quit as JDSU's chief operating officer after the hiring of Kevin Kennedy as CEO. Madavi now sits on Avanex's board (see JDSU Launches Regime Change and Syrus Madavi Joins Avanex Board).

Avanex stock was up 14 cents this morning, trading at $2.36.

— Craig Matsumoto, Senior Editor, Light Reading

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deauxfaux 12/5/2012 | 1:22:49 AM
re: Avanex Scores Major 'Coup' Jo....you were supposed to jump off the Titanic......not on to it.

Avanex's only core competance is buying overpriced, failing businesses and combining them to burn cash faster than any one of them could dispose of separately.

Was it a jump.....or a push?
sunra 12/5/2012 | 1:22:48 AM
re: Avanex Scores Major 'Coup' A chance to be a bigger fish in a slightly smaller pond.

Look at it this way, if AVNX goes belly-up in 18 months Jo won't get the blame, the result will be deemed inevitable.....if he turns it around he's a god. Either way gets President on his CV and nice package if things go south. Whats the downside?
somecandytalking 12/5/2012 | 1:22:48 AM
re: Avanex Scores Major 'Coup' i was wondering the same thing. anyone know the guy?

either he was pushed or he sees something @ avanex that we don't. their burn rate is awful and they're a long way from stemming the tide.
jeb_knucklehead 12/5/2012 | 1:22:48 AM
re: Avanex Scores Major 'Coup' At the time of the Alcatel Optronics/Avanex merger, Avanex let go a lot of Alcatel's experienced sales force (who knew everybody) go. After they did this, you had no idea who to call to fill orders for things like: DMLs, EMLs, etc... to put in products you had orders for. This went on for weeks. It was kind of amazing.

On top of that Avanex had people handling support issues for OE products whose only experience was in passives.

At the engineering level, I haven't seen anything in terms of a roadmap to show that they have a vision for the future.

I have heard that the company culture is rife with cronyism (much worse that at your average company).

It's pretty clear that this company is a total disaster in: financials, development, sales, customer support, and HR.

I would say that Mr. Major coming from JDSU management is not exactly a ringing endorsement (or a coup for that matter). JDSU is another example of a disaster of a company (I don't really need to qualify that do I?).

If Avanex really wanted to turn around they should have picked someone from outside the industry to turn it around. But then again, who would want that job?


somecandytalking 12/5/2012 | 1:22:45 AM
re: Avanex Scores Major 'Coup' agree with all you say. of course, it's not like ANY component company in winning any carnegie awards. which, i guess begs the question: if not avanex, where?

i believe we are seeing the turn in business accelerating and sustainable over at least teh next 2+ years. not a lot of component players left standing and i don't think the telco's are going to allow rfq's with a private company component source.

bottom line is that jds will get their share since they're the gorilla. still, everyone wants a 2nd source; so if not avnx, then who? mrvc? bookham?! avnx has enough business tied up thru the mergers to benefit and survive.

so, after thinking about it; i agree with the other post- he has nothing to lose and will probably end up riding the upturn and taking credit. the longer term question is whether avanex has the product pipeline to keep up.
deauxfaux 12/5/2012 | 1:22:44 AM
re: Avanex Scores Major 'Coup' Anyone notice that an awful lot of Jozef's guys are being replaced with Cisco guys?
fbgboy 12/5/2012 | 1:22:44 AM
re: Avanex Scores Major 'Coup' They will pay him with the money they make selling all their "surplus equipment". Could they have hyped thir auctions any more?
Cronyism(sic) is rife. Some of the R&Dguys only return calls back 2 months later and will not email any specs.
Still I predict they will survive, spin off bad divisions, take tax credit, buy other companies, shake the money so it does not look like it falls.
Jo can't lose a was said, but why the jump, invite him in for a cup!
JeffChetin 12/5/2012 | 1:22:36 AM
re: Avanex Scores Major 'Coup' President and Vice President of Transmission Systems leaving, Components group head jumping ship, E2O bought just to close Calabasas, Allentown closing its doors, mass exodus at Melbourne, what's left?
fbgboy 12/5/2012 | 1:22:35 AM
re: Avanex Scores Major 'Coup' Jd has been operating in kind of stealth mode, hard to get any public names and faces for direct comment. Recently thay have made several announce,ment with seveal faces. Very hard to predict what will happen. These guys will still be around for another decade or so. Expect a major announcement in next quarter fron SJ. ...and no it has no effct on my industry.
my 2 cents worth less
Dr.Q 12/5/2012 | 1:22:32 AM
re: Avanex Scores Major 'Coup' I've worked with Jo Major, as a customer of his when it was SDL. He knows his stuff technically, and is very good at getting things done. Can't comment on how well he navigated the politics of JDSU (which is another skill set entirely).

- Q
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