Already a leader in optical-networking infrastructure for
cable systems, Corning Inc. will expand its offerings with a $1.8 million buyout of Oak
Industries Inc.
A key element of the all-stock deal was Oak's Lasertron
Inc. subsidiary, a leading producer of pump lasers used in optical amplifiers.
Such gear is elemental to solutions such as
dense-wave-division multiplexing, which major cable operators are using to boost bandwidth
as they deploy more fiber in their local networks to support advanced services such as
telephony and interactive applications such as high-speed data.
Corning, a major buyer of Oak's pump lasers, manufactures a
lineup of virtually all elements to an optical network, including amplifiers; optical
components; specialty fiber, such as erbium-doped optical fiber used in optical
amplifiers; lasers and dispersion-compensation modules; hybrid fiber-coaxial cable; and
connectors.
Lasertron will beef up Corning's existing and developing
photonics line, enabling the companies to enter new market segments and improving
Corning's product profile with its existing markets.
"Merging Oak Industries' laser and detectors
technology with Corning's broad research and development capabilities will further
strengthen our leadership in the photonics industry," Corning CEO Roger Ackerman said
in a prepared statement.
Besides manufacturing pump lasers, Lasertron also makes
internal laser chips, plus transmission lasers and receivers used in metropolitan
transmission networks.
Corning is also acquiring Oak's Gilbert Engineering Co.
Inc. unit, a maker of coaxial connectors for broadband networks and microwave connectors
for satellite and telecommunications systems.
"You need to have a full portfolio of products to meet
customer requirements and be competitive," Corning spokesman Paul Rogoski said.
"The acquisition of Oak Industries -- specifically Lasertron -- allows us to have
that."
Other Oak subsidiaries include Oak Frequency Control Group,
which designs and manufactures frequency-control devices used as timing references for
fiber-optic, wireline and wireless applications; and its Controls Group, which includes
the Harper-Wyman maker of controls for the gas-range and gas-grill industries.
Corning agreed to pay 0.83 common shares for each
outstanding Oak share, or a premium of about 50 percent over Oak's price when the deal was
announced Nov. 12.
The deal -- structured as a tax-free transaction to Oak
shareholders -- was expected to close in the first quarter of next year. Corning said it
expected the acquisition to be integrated into its earnings in 2000.
Oak, based in Waltham, Mass., has about 3,900 employees
worldwide. It posted net income of $23.8 million on revenue of $323.2 million in the nine
months ended Sept. 30.
Corning, based in Corning, N.Y., posted a third-quarter
profit of $133.3 million on revenue of $1.1 billion.
