Expands SDL's DWDM Offerings to Network Monitoring Modules
SAN JOSE, Calif., March 8 /PRNewswire/ -- SDL, Inc. (Nasdaq: SDLI)
announced today the acquisition of Queensgate Instrument, Limited. The
agreement calls for payments of up to $210 million consisting of initial
payments of $3 million of cash and $57 million of SDL stock valued at the
average closing price for the 20 trading days ending February 28, 2000, and
contingent payments of up to $150 million based on Queensgate's pretax profits
in 2000 and 2001. Queensgate, a privately held company located in Bracknell,
U.K., is a leading manufacturer of optical network monitoring modules for long
haul terrestrial fiber optic transmission systems. Optical network monitoring
is expected to be a rapid growth market in the future as fiber optic networks
move towards higher channel counts, dynamic adding and dropping of wavelength
channels and, ultimately, all optical networks.
The contingent consideration of up to $150 million, which would be paid in
SDL shares, is based on the amount by which Queensgate's pretax profit in the
period from closing until December 31, 2001 exceeds threshold levels.
Queensgate will continue to operate as a wholly owned subsidiary of SDL, Inc.
In calendar year 1999, Queensgate reported revenues of approximately $9
million and has about 110 employees. Ken Reay, CEO and co-founder of
Queensgate, will continue with SDL as the Managing Director of the SDL
subsidiary and report to Greg Dougherty, chief operating officer of SDL.
"The acquisition of Queensgate demonstrates our strategy to diversify our
product lines by adding even more leading edge technologies," said Donald R.
Scifres, CEO and chairman of SDL, Inc. "Optical network monitoring is
expected to be a critical function within future optical transmission systems.
The move to higher channel count, narrower channel spacing and greater optical
transparency in the transmission system is creating a rapid movement from
electronic monitoring to optical monitoring. Queensgate's optical network
monitoring business grew by more than 70% in 1999. Queensgate's solution to
optical network monitoring employs what we believe to be the best tunable
filter technology presently available. With their tunable filter technology,
customers can monitor up to 256 channels on 50 GHz spacings across the entire
C and L band. We are very excited about the combination of our companies and
our technologies as it will further expand our product offerings to our
optical networking customers."
Ken Reay, CEO of Queensgate added, "By combining with SDL, we are teaming
with a market leader which has the financial and marketing resources we need
to fully exploit Queensgate's opportunity in optical network monitoring. We
believe these opportunities are large. Our network monitoring modules allow
the measurement of power in each channel, enabling our customers to
dynamically control amplifier gain and/or transmitter power. This capability
enhances the bandwidth and distance capabilities of each fiber system. By
adding Queensgate's line of network monitoring modules and its technology
leadership in tunable filters, SDL is able to offer a more complete set of
solutions to the customers."
About Queensgate
Queensgate is a leading supplier of embedded optical network monitoring
products. Their products are used to monitor the power and performance of
dense wavelength division multiplexed systems. The core of their optical
technology is a precision tunable filter based on nanopositioning technology.
Queensgate's customers are the major telecommunications systems manufacturers
worldwide where their products are integrated into high channel count fiber
optic transmission systems.
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 Queensgate, the expected
rapid growth of the optical network monitoring market and its critical nature,
the enabling of SDL to provide expanded product offerings to meet 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 network monitoring modules and
fully exploit expected large growth opportunities in network monitoring, and
the company's expectation to retain Queensgate's managing director. 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 successfully
incorporate the acquired business, an inability to retain Queensgate's
managing director, 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
network monitoring 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, of SDL, Inc.,
408-943-9411, or general info, Lisa Horn Chainey, investors,
Susan Katz, or media, Scott Marx, of The Financial Relations
Board, 415-986-1591, for SDL, Inc.
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