GN Nettest acquires Photonetics (France) in billion-dollar deal Thursday 16 November 2000 PDF Print November 15, 2000 - Caterham, Surrey, UK - The acquisition of Photonetics, announced today, signals a powerful addition to GN Nettest, adding testing technology for the latest high-capacity optical communication networks to an already impressive testing and surveillance solution package for network providers and operators. GN Nettest is a GN Great Nordic subsidiary and world technology leader in equipment and systems for testing and surveillance of optical communications networks. The Board of GN Great Nordic approved the decision for the acquisition of 100% of Photonetics S.A., an established supplier of instruments for testing and measuring the performance of DWDM systems and components. Photonetics is based near Paris, France. The company will be amalgamated into GN Great Nordic subsidiary GN Nettest, making GN Nettest the world leader in optical network testing solutions and equipment. In connection with the acquisition the Board also resolved to list GN Nettest through an IPO expected to take place in the first quarter of 2001. Technologies for a world moving at the speed of light "This acquisition should be seen as a follow on to last year’s acquisition of PK Technologies," said GN Nettest President and CEO, Jens Maaløe. "With PK Technologies, we acquired a range of All Optical Network testing products making GN Nettest the leading supplier of test equipment and systems in connection with optical fiber production and the laying of optical fiber cables. With the purchase of Photonetics, we have now added a number of patented technologies together with vital testing products for Dense Wavelengths Division Multiplexing (DWDM), a technology that dramatically boosts the transmission capacity of optical fiber networks." DWDM is a technology that, in layman’s terms, turns optical fibres into multiple-lane highways by using different wavelengths to carry separate streams of data simultaneously. Internet drives demand for network capacity "The exponential growth of the Internet, with data traffic rapidly outpacing traditional point-to-point voice and facsimile volume, means that the whole communication industry is working intensively on expanding the capacity of transmission networks by deploying new advanced optical technologies," Jens Maaløe stated. "The testing and surveillance technology developed by Photonetics enables equipment vendors to test the new complex network elements during development and production. By combining the technology of Photonetics with the strength of GN Nettest we can apply the same testing technologies during installation and management of these new optical networks." Technological strength in an expanding market The total DWDM market is expected to triple from today’s 5 billion USD a year to 15 billion USD in 2003, doubling the requirement for testing equipment and systems from today’s 1.2 billion USD today to 2.5 billion USD in 2003. Photonetics Chairman and CEO, Hervé Arditty, stated, "Photonetics is one of the five leading developers of testing equipment for laboratories and manufacturers of DWDM components," adding that the company’s TUNICS tunable laser that is used for DWDM testing ranks among the best on the market. Furthermore, Photonetics has leveraged its advanced technologies to develop high performance passive DWDM components. Photonetics stands at the threshold of some very exciting growth opportunities, and by combining forces with GN Nettest, we now have the best possible basis for pursuing these opportunities. The acquisition of Photonetics brings a synergy effect to GN Nettest, giving rise to growth expectations in excess of market growth in the coming years. A careful acquisition strategy combined with expanding demand, and a powerful range of products soon to be enhanced with new technology developments, have built a solid foundation for the company’s market position and future earnings." Hervé Arditty concludes. IPO scheduled for first quarter of 2001 As previously announced, GN Great Nordic recently began to analyse the opportunities for listing GN Nettest through an IPO. The reason for these considerations is that companies operating within the same industry as GN Nettest, particularly companies specialising in fibre optic test equipment, like GN Nettest, have achieved very high market capitalisations on NASDAQ. GN Great Nordic has sought to determine whether the assets of GN Nettest are properly reflected in the GN Great Nordic share price or whether any hidden assets can be made available to GN Great Nordic’s stockholders through a flotation of GN Nettest. The GN Great Nordic board anticipates that the acquisition of Photonetics will have an additional positive influence on its ability to attract and retain employees with leading edge competencies through stock options, especially in the company’s main North American market. GN Nettest Founded in 1971, GN Nettest is a wholly owned subsidiary of GN Great Nordic, based in Copenhagen, Denmark. GN Nettest is a leading worldwide supplier of test and measurement equipment, systems and related services designed to optimise communication network performance. GN Nettest develops and markets testing equipment and management systems for optical networks, and for datacom and telecom service networks, meeting the needs of carriers, enterprises, network equipment providers and research laboratories. GN Nettest products and solutions enable provisioning, troubleshooting and performance optimisation in today's most complex and hybrid networks. All GN Nettest testing equipment and solutions are based on the very latest user-friendly, cost-effective and scalable technology to ensure long-term investment value and low cost of ownership. GN Nettest is headquartered in Copenhagen and is represented worldwide through business centres in Denmark, USA and Canada. Sales are handled by subsidiaries in 11 countries and distributors in more than 60 countries all over the world. The company employs a total of more than 900 research and development, engineering, sales and administrative staff, and has sustained an compound annual growth rate of more than 50 % since 1998. The business philosophy of GN Nettest is to help its customers to secure the best possible operational and financial results from their communication networks through active cooperation and consultation. Photonetics Founded in 1978 by Chairman and CEO Hervé Arditty, Photonetics is a fast growing hi-tech company serving the exploding global market of photonics-based instruments and components. Photonetics designs and manufactures sophisticated products for testing and measurement of DWDM systems and components. Research and development are located together with the company’s production facilities at corporate headquarters just outside Paris, France. The company also has subsidiaries in the USA, Spain, Germany and UK. With 59 million USD in annual sales and a sustained 40%-plus per year growth rate, Photonetics employs nearly 400 professionals, including world-class physicists and several of the industry’s top sales and marketing engineers. The Photonetics customer portfolio includes some of the most prestigious network providers in the world with 40% of sales originating in the USA and a corresponding amount in Europe. For more information, please visit the website at http://www.gnnettest.com Photographs available. UK Contact; Dave Mehta GN Nettest Mob: 07831 431106 firstname.lastname@example.org Tel: 01883 349110 Fax: 01883 349160 Press contact: Jane Harrad-Roberts. 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