New Focus completes acquisition of JCA Technology

Jan. 17, 2001
New Focus, Inc., a supplier of fiber optic products for next-generation optical networks under the Smart Optics for Networks brand, announced that the company has completed its acquisition of JCA Technology, Inc.

New Focus, Inc. (Nasdaq: NUFO), a supplier of fiber optic products for next-generation optical networks under the Smart Optics for Networks brand, announced that the company has completed its acquisition of JCA Technology, Inc. The merger is structured as a tax-free exchange for JCA's shareholders and a purchase transaction for accounting purposes. JCA Technology, Inc. will operate as a wholly-owned subsidiary of New Focus.

As previously announced, New Focus and JCA agreed to amended merger terms on December 21, 2000. At the closing of the transaction on January 16, 2001, New Focus issued 10,033,556 shares of New Focus common stock and paid $75 million in cash to JCA's shareholders in accordance with the amended terms. The total transaction consideration for accounting purposes is approximately $363 million based on the $28.71 average price of New Focus shares for the seven-day period surrounding the announcement of the amended merger terms. As a result of the transaction, former JCA shareholders now own approximately 13.5% of the combined company. Including the shares issued in this acquisition, New Focus has approximately 74.4 million shares outstanding.

"From a technology standpoint, New Focus and JCA have complementary core competencies. New Focus brings expertise in optics and high-speed opto-electronics, while JCA contributes expertise in microwave electronics and packaging to the combined company. By applying these complementary skill sets, we plan to develop innovative opto-electronic components that will address the future requirements of the fiber optics industry," said Ken Westrick, president and chief executive officer of New Focus, Inc.

New Focus reported a pro forma net loss of $14.8 million on $46.5 million in revenue for the first nine months of 2000. Based on unaudited results, JCA operated profitably during the first nine months of 2000 on revenues of approximately $13.9 million. JCA's gross and operating margin percentages are already higher than New Focus' actual third quarter margins and targeted margins for 2001. As a result, the JCA transaction will be accretive to the revenue and margin lines, measured on a pro forma per share basis excluding acquisition-related charges such as goodwill and compensation expenses, in the first full quarter of combined operations. New Focus will announce its fourth quarter results on January 30, 2001 after the market closes.

Credit Suisse First Boston acted as financial advisor to New Focus in this transaction and CIBC World Markets acted as financial advisor to JCA.

About JCA Technology:

JCA Technology, now a wholly-owned subsidiary of New Focus, designs, manufactures and markets a full line of fiber optic products for OC-48 and OC-192 modulators, including high-speed clock amplifiers and broadband data driver amplifiers.

About New Focus:

New Focus designs, manufactures and markets innovative fiber optic products for next-generation optical networks.