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July 22, 2005 Minneapolis, MN -- ADC today announced an agreement to acquire Fiber Optic Network Solutions (FONS) for payments of $172 million in cash, net of any FONS debt at the time of closing. This amount is inclusive of a retention bonus pool that will be paid to most of FONS' current employees. The transaction is expected to close during the next 30 to 90 days.
Closing of the transaction is subject to approval by necessary regulatory authorities as well as customary closing conditions. After closing the transaction, 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, depending on when the transaction closes, to diluted earnings per share from continuing operations in the remainder of fiscal 2005 and around $0.05-$0.10 accretive to diluted earnings per share from continuing operations in fiscal 2006.
ADC says the acquisition is designed to further enhance and add scale to its existing line FTTX platforms, and to support its long-term goal of being among the leading providers of global network infrastructure platforms.
A privately held company financed by two rounds of venture investing and owned by Oak Investment Partners, Morgenthaler Partners, and its employees, FONS has approximately 60 employees worldwide and estimated 2005 sales of $95 million. In addition to its corporate headquarters in Marlboro, Massachusetts, FONS has strategic partnerships and outsourcing relationships in countries including Mexico, Japan, and China.
"FONS is a high-quality connectivity business that fits well with our strategy for capturing the strong growth potential of the FTTX market, which is in the early stages of its growth curve. This acquisition more than doubles our FTTX outside plant business to greater than 10% of total ADC sales," remarks Robert E. Switz, president and CEO of ADC.
"With ADC's strong financial and market position, solid intellectual property, and global reach of sales into more than 150 countries, coupled with FONS' fiber connectivity advancements, the combined entities will have the resources, distribution and support to make our FTTX offerings the best available solutions for our customers," adds Michael J. Noonan, president and CEO of FONS.
On closing the acquisition, Noonan will become vice president of business development for ADC's Global Connectivity Solutions business.
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