SDL Expands Passive Component Portfolio with $1.8 Billion PIRI Acquisition
The acquisition expands SDL's traditional role as an active components house, the company says, citing a critical silicon wafer based optical integration technology for dense wavelength division multiplexing (DWDM) systems.
"PIRI is the established leader in the rapidly growing market for AWG devices," says SDL CEO and chairman Donald Scifres. "As the channel count in DWDM fiber optic systems continues to increase towards several hundred DWDM channels and as the channel spacing continues to decrease towards 100 and 50 GHz, AWG products are expected to become the preferred technology over dielectric filter based wavelength mux and demux products for advanced systems."
"SDL is also a strong believer in optical integration technologies," Scifres continues. The power of integrated circuit style manufacturing processes utilized in the silica waveguide technology available at PIRI is crucial for next generation product development. Going forward, we expect to integrate more advanced devices such as variable optical attenuators, optical switches and optical add/drop multiplexers with the AWG products. This optical integration is expected to improve product performance while lowering manufacturing costs, thereby providing the best value for our customers."
PIRI will operate as a wholly-owned subsidiary of SDL Inc. In the first quarter of 2000, PIRI achieved revenues in excess of $20 million. PIRI has 133 employees. PIRI president Tadashi Miyashita is expected to continue as the general manager of the operation.
"By combining with SDL, we are teaming with a market leader which we believe will help us to expand our manufacturing and customer base," says Miyashita. "SDL has also maintained a core group of scientists in the field of silica waveguide technology which will further complement our technical expertise."
NTT Corp., Mitsubishi Corp., and Battelle formed PIRI in 1987, who together with Mitsubishi International Corp. are the current shareholders. In addition to arrayed waveguide grating mux/demux devices, PIRI supplies thermo-optic switches used in optical add/drop multiplexers, thermo-optic based variable optical attenuators (VOAs) used in gain equalization, and optical splitters used for distribution of the optical signals.
For its share of PIRI, Battelle expects to receive SDL stock worth $148 million, representing the largest single-sale transaction in Battelle's 70-year history, the company says. Battelle served as an incubator for PIRI with its Columbus research facilities.
"Battelle's strategy depends on creating and moving technology-based products into the marketplace, sharing in the financial successes of these ventures, and reinvesting our earnings in the next cycle of breakthrough technologies," says Battelle president and CEO Douglas Olesen. "This will ensure a bright future for Battelle as a leader in science and technology, and will help us meet our mission of serving the needs of the communities in which we do business."
Edited by Erik Kreifeldt