Skip to main content Snares Philips Unit

Hoping to broaden its reach into the broadband equipment market, Corp. will snap up Royal Philips Electronics N.V.'s broadband-networks division for approximately 80 million euros (roughly $78 million) and the assumption of certain liabilities. chairman and CEO David Woodle said Philips Broadband Networks would bring his company a full line of transmission products focused on the international marketplace.

PBN's product line includes valuable segmentable optical nodes "that will add nicely to our product family," Woodle noted. "Their wave-division multiplexing solutions are not only very strong, but complementary to our high-density platform.

"By adding together the technologies, it will allow us to really provide complete systems solution to our customers much sooner than we could have on a stand-alone basis."

The acquisition, expected to close by year-end, will triple's international business.

The integration process will cost about 2 to 3 cents in earnings per share for the next two quarters, according to Woodle. Upon completion, though, the acquisition will add more than $100 million in new business each year.

Some restructuring is likely as duplicate positions are eliminated, Woodle said. makes this acquisition as it braces for a financial hit, due to revenue losses tied to Adelphia Communications Corp.'s Chapter 11 bankruptcy proceedings. Not only will lose 10 percent to 15 percent of its business this year because of canceled Adelphia contracts, but the MSO also owes some $41 million for gear it has purchased. will have to take a charge for the outstanding accounts receivable, which could total as much as the full $41 million, said Woodle. But there's a silver lining.

"Most people believe based on the current assets a portion of that we will collect, and at a minimum we will get a tax refund of up to $10 million based on writing off that debt," he noted.