In a move expected to expand its lab test market presence, JDSU announced Thursday that it will acquire the Network Tools business of fiber optics subsystems provider Finisar Corp. for $40.6 million in cash. The transaction is expected to close before the end of July.

The Network Tools business, currently located in Sunnyvale, Calif., includes more than 100 employees worldwide. After the closing, Network Tools will form the Storage Network Test unit in the Instrument Business Div. of JDSU's Communications Test and Measurement business segment. Dave Buse will continue to lead the business under Jerry Gentile, general manager of JDSU's Instrument Business Div.

Network Tools, which had revenue of $44.2 million in Finisar's fiscal year 2009 ending April 30, 2009, is a provider of storage area network (SAN) protocol test tools, software and services that allow engineers, service technicians and network managers to generate and capture data at high speeds, filter the data, identify various types of intermittent errors and verify protocol compliance for SANs and LANs, including emerging technologies such as VoIP, 10 GigE, and iSCSI (Internet small computer system interface).

Because of the company's early work in developing the Fibre Channel standard for storage networks in 1994, it has cultivated a leading share of the test equipment market for SAN applications, Finisar said.

"The Network Tools business is an excellent strategic fit with JDSU," said Dave Holly, president of JDSU's Communications Test and Measurement business segment. "The acquisition will immediately establish JDSU as the leading provider of storage network test solutions and create new opportunities to deliver innovation and enhanced services to our lab and manufacturing customers from our combined test expertise."

The company said the acquisition will also allow it to combine its communications test development expertise in areas such as 40/100G with Network Tools' strength in storage network protocol test to fuel product innovation for areas such as Fibre Channel over Ethernet and other emerging SAN test markets.

For its part, Finisar said the sale will allow it to concentrate on its optical communications products.

"The recent Optium merger helped underscore the fact that we are primarily an optics company and that, for the Network Tools business to continue to grow and be successful, it needs to have a larger presence and a broader product line," said Jerry Rawls, Finisar's executive chairman of the board. "I confess I have mixed emotions about the sale as we started this business in the early '90s and have had a long track record of successes. We have helped our SAN customers create more reliable storage networks with robust interoperability. But, the sale of this business will enable us to focus all of our attention and resources on what we do best: design next generation products for optical communications."

JDSU expects the acquisition to contribute positive operating income in the second quarter of fiscal year 2010.

For more information, visit: www.jdsu.com or www.finisar.com