JDSU on Wednesday announced that its board had unanimously approved a plan to separate JDSU into two publicly traded companies, believing it will let shareholders pursue distinct investment opportunities in two growth markets being targeted by JDSU.
JDSU intends to split into:
- An optical components and commercial lasers company consisting of JDSU’s current Communications and Commercial Optical Products (CCOP) segment, serving the optical communications market. CCOP’s FY14 revenues were $794.1 million. Alan Lowe, CCOP's president since 2008 and executive vice president of JDSU, is the CEO-designate of the CCOP stand-alone company.
- A network and service enablement (NSE) company consisting of JDSU’s current Network Enablement, Service Enablement and Optical Security and Performance Products (OSP) segments. The NSE unit will primarily focus its investments in higher growth markets, particularly software supporting virtualized and software-defined networks, JDSU said. The combined revenue for NSE and OSP in FY14 was $949.5 million. Tom Waechter, JDSU’s president and CEO, will continue in this role with the stand-alone NSE company.
JDSU expects to complete the split by the third quarter of 2015, aiming for combined expense reductions of approximately $50 million. JDSU also expects to incur significant one-time charges related to the separation, noting that cash expenditures required to reach those intended cost savings will be in the range of $75 and $100 million.
“Over the past five years, 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 statement. “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.”
Centerview Partners and Goldman, Sachs & Co. are serving as advisors to the Company for this transaction
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