JDS Uniphase To Split Into Two Publicly Traded Companies

(RTTNews) - Communications solutions provider JDS Uniphase Corp (JDSU) said Wednesday its board has unanimously approved a plan to separate the company into two publicly traded entities in a bid to gain greater strategic flexibility in a dynamic market place.

JDS would split into an optical components and commercial lasers company ("CCOP") consisting of Communications and Commercial Optical Products segment; and a network and service enablement company ("NSE") consisting of Network Enablement, Service Enablement and Optical Security and Performance Products (OSP) segments.

CCOP serves a $7.4 billion optical communications market expected to grow at a compounded rate of 11 percent over the next four years. It also addresses an approximate $2.5 billion commercial lasers market, growing at a forecasted 7 percent annually. CCOP's FY14 revenues were $794.1 million.

The NSE company will be a leader in its core businesses, addressing an approximate $7 billion network and service enablement market expected to grow at 6-8 percent annually. The NSE company will primarily focus its investments in higher growth markets, particularly software supporting virtualized and software-defined networks. The optical security business addresses an approximate $1.1 billion market growing at an expected 6-8 percent. The combined revenue for NSE and OSP in FY14 was $949.5 million.

The separation is expected to occur through a tax-free pro rata spinoff of CCOP to JDSU shareholders, though the structure is subject to change based upon various tax and regulatory factors.

JDSU believes the separation will allow CCOP to devote enhanced focus to its leading position in telecom, expand its position in the high-growth datacom market, and grow its commercial lasers and 3-D sensing businesses.

It will also allow NSE to continue its leadership in network enablement, while continuing to transition to a more software-centric company aligned with the industry's rapid shift to software defined networks.