JDSU Tunes In Agility
Terms of the deal, which is expected to close before Dec. 31, were not disclosed. JDSU would pick up all 90 of Agility's employees at first, with layoffs coming, as Agility's California chip fab and Allentown, Pa., packaging facility would be shut down (see JDSU Buys Agility ).
Agility CEO Ron Nelson would become the head of a new Telecom Modules business unit inside JDSU. His purview would include Agility and all of JDSU's telecom transponders.
For seven years, Agility has waited for the tunable laser market to ignite, racking up more than $200 million in funding along the way. The latest round closed earlier this year (see Agility Snares Another $15M).
Agility and fellow tunables pioneer Iolon Inc. had on-and-off relationships with Light Reading's Top Ten Private Companies list. Both were considered prime acquisition candidates at first, but as the years wore on with little activity to show for it, both fell off the list.
They have spent the past few years facing down repeated questions about their futures, as rumors periodically cropped up about one or both being on the verge of collapse (see Iolon's Alright and Agility Is Alright, Too).
Today's announcement moved JDSU stock up 5 cents (3%) to $1.60.
For JDSU, the deal represents a chance to get into tunable lasers, now that the prospects for the technology are more realistic.
Tunable lasers were all the rage in 1999, as they were a newfangled technology that could lower the costs of DWDM. But the lasers were too expensive at first, and the telecom downturn dampened the need for DWDM deployments.
"The need for tunable lasers is clear -- for sparing, for reducing inventory of fixed lasers. That's always been true, but the hype of tunable lasers got ahead of its time," says John Harmon, an analyst with Needham & Co. "This was a gap in JDSU's product portfolio, so it makes sense."
JDSU wants to pack tunable lasers into small modules, of the SFP and XFP variety. Agility had been focusing its development on monolithic integration of indium phosphide (InP) components, the kind of techology that would lend itself to such small packages. That became the deciding factor in picking up Agility, says Enzo Signore, director of marketing for JDSU.
"The proven monolithic technology was one we felt could get us to XFP and SFP fastest," Signore says. The tunable laser camp faces increased competition these days. offers tunable lasers, and Bookham Inc. (Nasdaq: BKHM; London: BHM) has demonstrated tunable technology at conferences; meanwhile, startups Santur Corp. and Syntune AB are staying in the game with recent funding rounds. (See Intel Launches Tunable Laser, WWP Names Customer, Santur Raises $16.6M, and Syntune Raises €4.7M.)
Previously, JDSU took a glance at the tunable laser market through its acquisition of SDL. When it chose not to pursue one of SDL's laser projects, group manager Bardia Pezeshki departed to found Santur, which received "a modest investment" from JDSU at one point, says Gurinder Parhar, Santur's vice president of marketing.
JDSU ships a tunable transponder that uses Santur's laser, and that product would still be supported after the Agility acquisition, Signore says.
The optical components market is beginning to see some long-awaited consolidation, but the action has been among the smaller companies. Startups have joined forces, getting an infusion of cash from investors along the way (see ASIP, T-Networks Reach Apogee and Continuum, Polatis Join Forces).
And while JDSU has made a few acquisitions in the past year, the deals have been outside of telecom optics, mostly. Its biggest buy was in the related test-and-measurement arena, where it snapped up for $760 million (see JDSU Buys Into Testy Market).
— Craig Matsumoto, Senior Editor, Light Reading