Former Canadian optical networking equipment maker JDS Uniphase is going through another change of life.
The company, now headquartered in California, is splitting in half to take advantage of virtualized and software-defined networks. When complete in the third quarter of 2015 the two publicly-traded companies will comprise
- an optical components and commercial lasers company, made up of JDSU’s current communications and commercial optical products division. The board says the US$7.4 billion optical communications market is expected to grow at a compound rate of 11 per cent over the next four years, while the US$2.5 billion commercial lasers market will growing at a forecasted 7 per cent annually. JDSU executive vice-president Alan Lowe will be its CEO.
- A network and service enablement company, consisting of JDSU’s current Network Enablement, Service Enablement and Optical Security and Performance Products (OSP) divisions. This new company will go after an approximate US$7 billion network market expected to grow at 6-8 per cent annually. To be headed by current JDSU CEO Tom Waechter, this company will primarily focus its investments in higher growth markets, particularly software supporting virtualized and software-defined networks. The optical security business is a US $1.1 billion market growing at an expected 6 to 8 per cent, the company said.
The company didn’t detail what will happen to its Ottawa research lab, which has over 300 staff. It has done work on ROADM (reconfigurable optical add-drop multiplexer) products.
These were two separate companies already, Jennifer Clark, vice-president of 451 Research said in a note. The division will give both greater latitude to pursue their markets. She added it will also make it easier for the financial industry to understand two companies rather than one with a wide range of products.
“Over the past five years, JDSU [Nasdaq: JDSU] has invested heavily in innovation that is well aligned with the industry’s best growth opportunities, including cloud networking, data center expansion and software-defined networks,” Waechter said in a release. “These opportunities extend beyond the traditional telecom ecosystem and now include Web services, over-the-top, enterprise and other customers. We believe two fundamentally focused companies best position us to stay ahead of the accelerating pace of technology change and to compete even more effectively across the unique markets we serve today.”
“Now is the time to make this transition, giving these businesses the opportunity to maximize their success while providing shareholders with distinct investment opportunities in two growth markets.”
For the fiscal year ending June 28, JDSU suffered a loss of US$17 million on revenue of US$1.7 billion. The year before it eked out a US$57 million profit on revenue of US$1.67 billion.