Deal strengthens Alcatel Optronics position in fast-growing passive components for next-generation DWDM networksParis, France and Gatineau, Canada - 5 July 2000 - Alcatel Optronics, a world leader in opto-electronic components for telecommunications systems, today announced that it has entered into an agreement to acquire privately held Innovative Fibers, Inc., the world leader in DWDM optical filters known as Fiber Bragg Grating technology (FBG)*, for US$175 million. The deal signals the continued commitment of Alcatel Optronics to expand its activity in the fast growing domain of passive components for DWDM systems as well as in North America.
The telecommunications industry is in a period of phenomenal growth. Operators are accelerating deployment plans for high-performance telecommunications systems to keep up with the explosive growth in bandwidth demand, and as a result system manufacturers are pushing their suppliers of critical opto-electronic components for more sophisticated solutions and reduced development and delivery times. The acquisition of Innovative Fibers strengthens Alcatel Optronics' ability to quickly deliver highly integrated, cost-effective opto-electronic solutions to meet these demands.
Innovative Fibers' key technological expertise is the development and manufacture of Fiber Bragg Gratings, a passive optical component critical for multi-channel Dense Wavelength Division Multiplexing (DWDM) applications. Passive components process and modify the signal along the optical path. As system manufacturers request the integration of more and more functions at the component level, it becomes critical for component manufacturers to have access to a wide range of both active and passive optical technology. Already a world leader in active components, Alcatel Optronics will offer a unique active and passive portfolio thanks to the acquisition of Innovative Fibers. Alcatel Optronics will market Innovative Fibers' existing standalone products and will also integrate the technology into its portfolio of optical interface and amplifier modules - speeding delivery of highly-integrated solutions and help lower design, development and manufacturing costs for Alcatel Optronics' customers.
Gain Flattening Filters (GFFs), which are one of the most common applications for FBGs, are used in DWDM systems to assure that each wavelength on a single fiber is of equal amplitude, thus optimizing quality of transmission. Alcatel Optronics is the world's number one supplier of Gain Flattening Filters (GFFs) for submarine applications. Innovative Fibers is the technology leader for terrestrial GFFs. This strong potential synergy presents an extraordinary opportunity for Alcatel Optronics to lead in covering all GFF applications for DWDM systems.
Moreover, one of the key elements of a DWDM system is the receive filter which separates the different wavelengths. Innovative Fibers masters the athermal packaging of these filters, allowing compliance with the toughest specifications for transmission systems which must operate over a large temperature range. The integration of this athermal packaging within Alcatel's terrestrial transmission systems will soon help Alcatel to offer DWDM systems with a capacity in excess of 160 wavelengths.
Christian Reinaudo, President of Alcatel's Optics Group, stated: "Through this acquisition, Alcatel will strengthen its global leadership in all optical networking technologies and Alcatel Optronics will continue its established record of rapid growth. This deal will also allow us to reinforce our worldwide number one position in submarine and terrestrial DWDM systems."
Benoît Lavigne, President and co-founder of Innovative Fibers, noted: "We will be able to leverage Alcatel Optronics' existing customer base and sales force to fully capitalize on our growth potential as a supplier of FBG based fiber-optic components. Alcatel's financial and technical resources will also allow us to significantly expand our manufacturing capabilities to meet the rapidly growing customer demand for FBG based components. And by pooling our R&D resources, we can better and more quickly meet our customers' demands for innovative components".
Based in Gatineau, Quebec, Innovative Fibers was founded in 1995 by Benoît Lavigne and Bernard Malo, who worked for 6 years at the Canadian Communications Research Center (CRC) on FBG technology. The company employs approximately 220 people, including a highly skilled technical team.
Completion of the transaction is subject to approval by Innovative Fibers' shareholders and other customary closing conditions. The transaction is expected to close in approximately four weeks.
*Note to editors: About Fiber Bragg Gratings Technology
The three main uses for Fiber Bragg Gratings are controlling, combining and routing light. FBGs are used in DWDM optical transmission systems which carry multiple wavelengths (channels) over the same fiber. FBGs consist of lengths of special fibers which are etched with micron-level precision in order to cause certain wavelengths passing within the fiber to reflect differently than others. Once spliced into a fiber optic line, FBGs allow the filtering, and re-direction, of these selected wavelengths, thus providing a simple method of routing or control. FBGs are also used in optical signal amplification to filter out all but a single, precise wavelength from laser pump sources, which are used to provide optical power to the amplifier. Such pump "fine tuning" can be an important factor in controlling the performance of the signal re-generation, adding a controlled level of optical power at the optimum wavelength for a given type of transport optical fiber used.
The Optronics Division of Alcatel markets a full range of devices and solutions for fiber optic communications. Operating state-of-the-art manufacturing plants in France and in the USA, it is a leading supplier of DWDM lasers, photodetectors, optical amplifiers, high-speed interface modules and key passive devices such as arrayed waveguide multiplexers and Fiber Bragg Grating filters.
Alcatel builds next generation networks, delivering integrated end-to-end voice and data communications solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion in 1999, Alcatel operates in more than 130 countries.
About Innovative Fibers
Innovative Fibers was founded by Benoit Lavigne and Bernard Malo in 1995 and is a leader in the design and manufacture of FBG based components for the fiber optics industry including gain flattening filters, 50Ghz and 100Ghz DWDM filters and 980nm and 1480nm pump laser stabilizers.