Acquisition Intended to Expand SDL's Module Level Offering to Dense Wavelength
Division Multiplexing Customers
SAN JOSE, Calif., Feb. 29 /PRNewswire/ -- SDL, Inc. (Nasdaq: SDLI)
announced today the signing of a definitive merger agreement with Veritech
Microwave, Inc. valued at $590 million based on the February 28, 2000 SDL
closing stock price. Veritech, a privately held company located in South
Plainfield, New Jersey, is a leading manufacturer of high speed optoelectronic
modules for long haul undersea and terrestrial fiber optic transmission
systems. The acquisition will further SDL's position in high performance
OC-192, 10 Gb/s module level transmitter and receiver products, and is
expected to provide the functionality and performance required by SDL's large
base of dense wavelength division multiplexing (DWDM) customers.
The merger agreement provides for the issuance of 1.5 million shares of
SDL, Inc. stock in exchange for all of the stock of Veritech. Completion of
the transaction is subject to customary closing conditions, including
government and regulatory approval and is expected to close at the end of the
first quarter. Veritech will continue to operate as a wholly owned subsidiary
of SDL, Inc. In calendar year 1999, Veritech reported revenues in excess of
$22 million and has approximately 100 employees. Pat McGeough, Sr., CEO and
founder of Veritech, will continue with SDL as the General Manager of the SDL
subsidiary and report to Greg Dougherty, chief operating officer of SDL.
Donald R. Scifres, CEO and chairman of SDL, Inc. stated, "As the industry
moves to 10 and 40 Gb/s systems, our customers are demanding product modules
with greater levels of functionality and performance. Veritech, through its
co-planar technology, has demonstrated what we believe is the best bit error
rate performance at OC-192 data rates allowing Veritech to service both long
haul terrestrial and undersea markets. Veritech's technology is also expected
to be a leading candidate for the OC-768 40 Gb/s systems of the future. SDL
continues to pursue its strategic goal of enhancing and broadening its
technology base through strategic acquisitions. With the acquisition of
Veritech, SDL continues to position itself as a leading independent supplier
of active components and optoelectronic modules in the industry."
Patrick McGeough, Sr. added, "By combining with SDL, we are teaming with a
market leader which we believe will help us to expand our manufacturing and
customer base. SDL is a leader in the manufacturing of OC-192 light
modulators and active components used in DWDM systems, while Veritech is a
leader in high speed electronics for drivers of external light modulators and
high performance optical receivers. The combination of the two organizations
enables the development of transmitter and receiver modules that offer
telecommunications customers what we believe to be state-of-the-art
performance for their OC-192 systems of today and the OC-768 systems of
tomorrow."
About Veritech
Veritech is a leading supplier of high speed transmission and receiver
electronics. Their products interface between the electronic multiplexer and
the optical components and consist of external modulator drivers and
digitizers on the transmit side and limiting amplifiers, digitizers, low pass
filters, clock recovery electronics and optoelectronic receivers on the
receive end of the transmission system. Historically, most of Veritech's
business has been in supplying the undersea market with electronics that
accommodate OC-48, OC-96 and OC-192 rates. As the data rates and transmission
spans increase for terrestrial systems, the demand for Veritech's products has
gone beyond that of traditional undersea equipment manufacturers to include
some of the long haul terrestrial equipment suppliers.
About SDL
SDL's products power the transmission of data, voice and Internet
information over fiber optic networks to meet the needs of telecommunications,
dense wavelength division multiplexing (DWDM), cable television and satellite
communications applications. They enable customers to meet the bandwidth
needs of increasing Internet, data, video and voice traffic by expanding their
fiber optic communications networks much more quickly and efficiently than
would be possible using conventional electronic and optical technologies.
SDL's optical products also serve a variety of non-communications
applications, including materials processing and printing. Additional
information about SDL, Inc. is available on the Internet at http://www.sdli.com .
Statements in this press release which are not historical including
statements regarding SDL's or management's intentions, hopes, beliefs,
expectations, representations, projections, plans or predictions of the future
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements include statements regarding
the furthering of the leading positions of SDL and Veritech, the enabling of
SDL to provide products with performance its DWDM customers demand, the
ability of the merged companies to successfully integrate and expand their
product lines, customer base and manufacturing capability and offer the
highest performance OC-192 transmitter modules and be the leading technology
for the OC-768 systems of the future, the company's expectation to retain
Veritech's general manager, and the expected closing date. It is important to
note that the Company's actual results could differ materially from those in
any such forward-looking statements. Factors that could cause actual results
to differ materially include delay or failure to complete the transaction or
successfully incorporate the acquired business, an inability to retain
Veritech's general manager, risks related to uncertainties in or failure to
meet customer product specifications and market requirements, an inability to
expand the company's product lines and customer base, inability to develop new
OC-768 products in a timely manner, and the risk factors listed from time to
time in the Company's SEC reports including but not limited to, the annual
report on Form 10-K and 10-K/A for the year ended January 1, 1999, and the
quarterly reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1999.
For more information on SDL, Inc. at no cost, please call 800-PRO-INFO
(U.S.) or 732-544-2850 (Int'l), ticker symbol, SDLI.
SOURCE SDL, Inc.
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Related links:
http://www.sdli.com
CONTACT:
Donald R. Scifres, Chairman and CEO, or
Michael L. Foster, VP Finance and CFO, both of SDL, Inc.,
408-943-9411; or general info, Lisa Horn Chainey, investors,
Susan Katz, or media, Scott Marx, all of The Financial Relations
Board, 415-986-1591
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