ADC completes acquisition of Fiber Optic Network Solutions

Aug. 29, 2005
August 29, 2005 - Acquisition approximately doubles ADC's FTTX outside plant business.

ADC has completed its acquisition of Fiber Optic Network Solutions (FONS) Corp. a manufacturer of high-performance passive optical components and optical fiber cable packaging, distribution and connectivity solutions.

"We are excited to add the innovative technologies that FONS has developed into our portfolio of FTTX (fiber-to-the-x) solutions," says Robert Switz, president and CEO for ADC. "As a combined company, we can more fully leverage our strengths to deliver on customer demands for fiber in the central office, the outside plant and at the customer premises. In addition, the acquisition enhances our capabilities to capitalize on an FTTX market that has significant future growth potential."

ADC's OmniReach Solutions are platforms designed to meet the unique requirements of FTTX networks. Service providers can build network infrastructures using ADC's OmniReach Solutions. These are designed to accelerate deployment and maximize operational efficiency from the central office to the outside plant. Through its Professional Services organization, ADC also provides a suite of service solutions to plan, deploy and maintain FTTX NETWORKS.

The FONS acquisition approximately doubles ADC's FTTX outside plant business to greater than 10% of total ADC sales and will be accretive to earnings per share, excluding acquisition-related charges, acquired intangibles amortization and FONS employee retention payments. The acquisition was completed for approximately $172 million in cash. This amount is inclusive of a retention bonus pool that will be paid to most of FONS' current employees. FONS has approximately 60 employees worldwide and estimated calendar 2005 sales of $95 million. In addition to a facility in Marlboro, MA, FONS has strategic partnerships and outsourcing relationships in countries including Mexico, Japan and China.

"ADC's acquisition of FONS is strategically important as equipment vendors continue to consolidate in the industry," says Matt Davis, director of Broadband Access Technologies for Boston-based Yankee Group. "As they were, both entities gained considerable market penetration as fiber deployments began to ramp up in 2004 and deployments continue to broaden today. The combination makes sense as service providers look to equipment providers that can quickly scale to enable mass-market deployments."

ADC expects to take a charge for various acquisition-related expenses the amount of which has not been determined. Excluding the charge, amortization of acquired intangibles and scheduled payments of a FONS employee retention pool, ADC expects the acquisition to be around $0.00-$0.01 accretive to diluted earnings per share from continuing operations in its fiscal fourth quarter ending Oct. 31 and around $0.05-$0.10 accretive to diluted earnings per share from continuing operations in fiscal 2006.

ADC is based in Minneapolis, MN. For more information visit

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